Around 150,000 consumers whose PPI claims were previously rejected are to have their cases re-opened because of a tightening of the rules governing investigation.
The Financial Conduct Authority (FCA) has ordered Britain’s high street banks to write to an estimated 150,000 customers whose claims under the Plevin regulations were previously rejected inviting them to resubmit their claims.
Change in the rules
The regulator is concerned that thousands of consumers who previously had their claims turned down by their lenders are not aware that a change in the rules regarding commission paid on sales means they may have been mis-sold and are eligible for compensation.
In 2014 the High Court ruled that Mrs Susan Plevin had been mis-sold her policy because she was not made aware of the high rate of commission on the sale received by the firm that sold the policy.
Following the Plevin ruling the FCA updated the mis-selling criteria and ruled that any commission over 50% of the cost of the policy was excessive and had to be repaid to the consumer.
But thousands of people had already had their claims rejected before the new rule came into force.
The watchdog is concerned that those thousands of people may not be aware they have the right to have their claim re-assessed before the PPI claims deadline on August 29th.
When the FCA announced its claims deadline it launched a £42 million consumer awareness campaign, warning potential claimants that their claim had to be received and acknowledged by their lenders before the cut-off date or they would lose their right to claim forever.
All potential Plevin cases were included in the same timeframe, but the FCA is concerned the message may not have got through to everyone with the right to make a claim.
In a statement it said: “These consumers may have disengaged from the PPI issue, and be desensitised to our campaign’s messaging and prompts to action. This is because they previously complained about mis-selling but were rejected.”
The regulator has now instructed the banks to write to anyone who took out PPI before April 6th 2007 and have previously had a claim rejected, inviting them to resubmit their claim
The FCA believes around 10,000 people were previously told they couldn’t complain about commission costs and a massive 140,000 whose rejected cases were never assessed under the Plevin rules.