Financial Conduct Authority
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FSA grants temporary extension for some PPI complaints
The Financial Services Authority (FSA) today agreed to temporary arrangements for Barclays, Lloyds Banking Group and RBS to handle Payment Protection Insurance (PPI) complaints. The arrangements extend the time periods the firms have to deal with their backlog of stayed PPI complaints and the high volume of new complaints on PPI. These arrangements have been put in place to ensure that the firms are able to handle the PPI complaints properly.
Under FSA rules PPI complaints have to be responded to within eight weeks. The extension agrees a timeframe for the firms to deal with the claims that have been put on hold and also agrees additional time for the firms to deal with PPI complaints received since the end of their involvement in the judicial review:
PPI complaints still with the firm but put on hold during the judicial review will receive a decision by the end of August;
PPI complaints received after the conclusion of judicial review but on or before the 31 August will be responded to within 16 weeks; and
PPI complaints received on or after 1 September and before 31 December 2011 will be responded to within 12 weeks.
Strict conditions have been imposed on the temporary time extensions; the firms with the temporary time extension will have to:
keep PPI complainants and their customers fully informed; and
provide the FSA with regular reports on compliance.
The FSA expects all PPI complaints handling to return to the requisite eight-week standard by 1 January 2012 at the latest.
This arrangement only applies to the three named firms. All other PPI complaints are unaffected.
Margaret Cole, the FSA’s interim managing director of the Conduct Business Unit, said:
“We want to see all PPI claims for compensation dealt with swiftly and appropriately. However some firms are facing a huge backlog and now a surge of new complaints which has created a bottleneck. It is not in the interests of consumers to receive further poor handling of their complaints as a result. This temporary extension means that these firms can process these complaints properly and fairly.
“We will be monitoring their progress carefully to ensure the new deadlines are met, that complaints are dealt with as promptly as possible and the backlog is cleared as a matter of urgency.”
A number of firms decided to put some or all PPI complaints on hold when the British Bankers’ Association launched a judicial review of the FSA’s new PPI complaints handling measures. The FSA and the Financial Ombudsman Service won the case and the BBA decided not to appeal on 9 May 2011.
Notes to editors
The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.