A claims management company has mounted a legal challenge to the Financial Conduct Authority’s newly imposed deadline to wind up claims relating to the mis-selling of payment protection insurance (PPI).
The move, by Wales-based claims firm We Fight Any Claim, casts doubt on whether the cut-off date of August 2019 will remain in place due to what the judicial review says is a “clearly unlawful” decision. The company claims that unless the deadline is lifted, it would result in a “win” for the big banks and credit card firms who sold PPI to the largely unsuspecting public.
We Fight Any Claim legal advisor Mark Davies said the firm had been actively lobbying the FCA not to introduce its deadline, as more time should be allowed to make PPI claims, but their pleas had fallen on deaf ears.
“Over the last 12 months, we have repeatedly warned FCA that what they planned was not just plain wrong but was clearly unlawful,” he said. “We have also provided the FCA with the detailed and closely reasoned opinion of leading counsel, Stephen Knafler QC, as to the fundamental problems with their approach.”
He warned: “Unless these proposals are challenged, the only winners will be the banks and card providers who sold this toxic product. Millions of ordinary people, many of whom are not even aware they were sold PPI, will lose out.”
The FCA decided to impose its deadline in March, saying it was necessary to prod people into checking if they were mis-sold PPI and to make a claim if they can – instead of putting it off and the entire PPI saga dragging on endlessly.
“Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off,” said FCA chief Andrew Bailey. “We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.”
He added: “We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”
Since January 2011, a total of £26.9 billion in refunds and compensation has been paid out by financial firms who mis-sold PPI to their customers — and the new deadline is projected to trigger a fresh wave of claims. Up to now, claims firms have made around £5 billion in fees from processing PPI claims for their clients, with many of them using such tools as claims management software to deal with high volumes of cases quickly and easily.
The FCA is working with top advertising agencies to launch a campaign later this year, possibly in August, reminding people to see if they can claim for mis-sold PPI. Hollywood action star Arnold Schwarzenegger is reportedly set to front the campaign and to receive a big payout of his own, to the tune of £1.5 million.
The choice of star is certain to generate enormous interest in the UK and demonstrates just how keen the FCA is to bring about an end to the PPI mis-selling scandal.