Grovelands CEO, Ben Wilson, summaries the changes to PPI rules and provides an update about We Fight Any Claim’s application to the High Court for a judicial review.
On the 2nd March 2017, the FCA published PS17/3 following on from last year’s consultation (CP16/20) announcing the final details for its plans to put a deadline on the PPI complaints. As we approach the implementation of those final rules coming into force on 29 August 2017 it is worth reviewing recent developments and considerations.
The headline requirements of the final rules are:
- In most cases 50% is the tipping point for unacceptable levels of commission earned on selling PPI. Firms must consider profit share arrangements when calculating these commission rates. The FCA have encouraged the ‘smoothing’ of profit share arrangements to reflect the periods over which profit share payments have been eared rather than paid.
- Firms must contact previously rejected mis-selling complainants before the end of 2017 to explain to them that in light of Plevin they are eligible to complain again.
- The FCA will run an industry funded consumer awareness campaign to encourage those people yet to complain to do so before the deadline of 29 August 2017.
Whilst the introduction of a time-bar has been broadly welcomed by the industry, claims management company We Fight Any Claim, has applied to the High Court for a judicial review of the final PPI rules, arguing that the reclaim deadline is a mistake and puts the protection of the financial industry ahead of consumers. As a result of this development firms will be looking at developing contingency plans to make ‘top-up’ payments should any changes to the commission tipping point be made.
Few details of the FCAs advertising campaign have been revealed. Recent speculation has suggested that The Terminator, Arnold Schwarzenegger, will be fronting the campaign and that it will be delivered in stages to help consumers first understand if they have had a PPI policy, before following up on how to make a complaint. The impact on complaint volumes for firms as a result of the campaign is difficult to predict (we have heard firms planning on volumes between 60%-120% of historical peaks) but it is expected to surge around the ‘bursts’ of campaign activity.
The FCA has been clear that they expect firms to have introduced appropriate independent challenge and scrutiny of the assumptions, methodology and plan that they have developed. This does not need to necessarily come from a third party but needs to be appropriately independent from those responsible for the development of the work.
Grovelands continues to provide a variety of resourcing solutions to support firms in all aspects of PPI complaint handling.
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