Have you heard of the Financial Conduct Authority? Who are they and what have they got to do with PPI claims?
The Financial Conduct Authority (FCA) is a UK governing body that plays an important role within the financial sector. You may have heard about the FCA from advertisements for PPI claims or during other awareness campaigns. Below, we explain who exactly they are and how they affect you when dealing with financial services and institutions.
The Role of the FCA
The FCA regulates over 58,000 financial services firms and is the prudential regulator for 18,000 of these companies. Their website states, “Financial markets need to be honest, fair and effective so that consumers get a fair deal. We aim to make markets work well — for individuals, for business, large and small, and for the economy as a whole.”
Financial services contribute over £65 billion tax to the UK economy. Ensuring that all businesses involved are working as they should be, and in the interest of the consumer, is essential.
FCA and PPI: What Do They Do?
In 2005, the Financial Services Authority (the FCA replaced the role of the Financial Services Authority) took over the regulation of general insurance. Later that year, it published a report on PPI and identified poor selling practices.
In 2006, it began to fine firms for their mis-selling tactics. As the news of mis-sold PPI policies spread, the Financial Ombudsman asked the FSA to look into how the banks were handling PPI complaints.
In 2009, the FSA banned the sale of single-premium PPI. It wasn’t until 2011 after the banks argued about the regulations that the high court ruled against the banks, forcing the banks to refund consumers and deal with millions of PPI claims.
Since then, the FCA has regulated how the banks handle PPI complaints. The FCA ensures that the banks are handling claims effectively and processing claims swiftly.
The FCA has fined many of the banks for their mis-selling tactics and for how they have handled PPI claims. In 2015, Lloyds was fined a record £117 million for handling PPI claims incorrectly. The bank was also fined over £4 million in 2013 and continue to refund millions of pounds to consumers for PPI claims.
Other than regulating how the banks handle claims, it also looks at what the guidelines are for refunding customers. More recently, the FCA is undergoing a consultation about the Plevin rule and how this affects those making claims. It is currently reviewing whether a lack of reminding customers about the commission on their PPI policies also constitutes for a refund under the Plevin rule. The statement will be released in 2019.
Got questions about making a PPI claim? Read our frequently asked questions to find out more about PPI and what it means for you.
PPI Claims Companies and the FCA
The claims management regulator currently regulates all claims management companies. With some rouge PPI claims companies operating, the regulator aims to make it clear for customers which companies are authorised. Its role is also to ensure companies abide by all of the necessary regulations.
However, after April 2019, the FCA will regulate claims management companies. They want to improve the public confidence in claims companies — as many have scammed individuals out of money. It will also ensure that customers are treated fairly and a common set of standards are set across firms. Some of the procedures and rules it plans to impose are:
- Keeping a record of all phone calls for twelve months
- Companies must tell individuals that there is a free option for making PPI claims
- If “lead lists” are obtained by third parties, they must ensure the contacts have been collected legally
- A summary document will be sent to the individual outlining fees involved before any contract is signed.
The FCA PPI Deadline
It’s highly likely that you’ve heard about the PPI deadline and seen Arnold Schwarzenegger’s robotic head on your TV or a billboard. The deadline for consumers to submit PPI claims to their bank is 29th August 2019. The FCA imposed this date.
But, why create a deadline that could be detrimental to consumers? The deadline aims to draw a line under the mis-selling scandal and encourage people to claim if they’ve not done so already.
The FCA began a two-year awareness campaign about the deadline that started in August 2017. Eighteen of the banks involved in the mis-selling scandal contributed £42 million to the advertising campaign. The campaign has spread the message of the deadline across TV, radio, billboards and social media.
But now customers now have only eight months to contact their banks and lenders about potential mis-sold PPI. As the deadline gets nearer, the banks are likely to be even busier, meaning consumers should act soon if they want to make a claim. It’s important to start your claim now if you have not yet done so.
Individuals can make a claim themselves or use a reputable PPI claims company to act on their behalf. If the claim is successful, a small fee will be taken by the company.
Contacting the FCA
If you want to find out more about the FCA and how to contact them about PPI claims, you can visit their dedicated PPI website. The website has received over nine million page views from over three million users.