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Mis-sold consumers could face PPI claims deadline

The banks are said to be in talks with the regulator to draw a line under the payment protection insurance (PPI) mis-selling scandal.


by Michelle McGagh on Jan 16, 2013 at 14:15

Mis-sold consumers could face PPI claims deadline

A deadline for consumers to place payment protection insurance (PPI) claims could be enforced if the banks have their way.

The banks are in talks with the financial regulator and are believed to have put forward the idea of a deadline for PPI complaints, which threaten to cost them billions more than originally thought, according to The Times.

Banks are currently struggling to get through the back-log of PPI complaints and are concerned that the bill will exceed the £13 billion the banks have put aside to compensate customers. There are predictions that the costs could hit £25 billion or even £40 billion in a worst case scenario.

It is understood that the British Bankers’ Association (BBA) has suggested the Financial Services Authority (FSA) enforce a deadline of next summer for the submission of claims in return for the banks agreeing to fund an advertising campaign that would flag up the deadline.

Putting a deadline on claims would be controversial. By law consumers have six years to lodge a complaint about a financial product but are granted another three years to lodge a complaint if they become aware that they have been mis-sold to.

This means that someone mis-sold PPI in 2005 can still claim, even though the six-year rule expired in 2011.

It is thought the deadline and advertising campaign could act as a trigger for the three-year complaint period after which no more PPI complaints would be handled.

According to the FSA 16.1 million PPI policies have been sold since 2005, with a value of £17 billion. It estimates that the total value of PPI policies sold between 2001 and 2004 is £16.9 billion.

The BBA refused to confirm whether it had suggested the deadline idea to the FSA.

A BBA spokesman said: ‘We are working with our members on a number of aspects of PPI complaints. The on-going work focuses on three issues as a priority: addressing backlogs, making sure that customers can be confident that the offers they receive are right and highlighting that there is no need for them to engage a claims management firm.

‘Discussions with the FSA to clarify the parameters of their complaints handling guidance are on-going. We are unable to comment further at this stage.’

A spokesman for the FSA said it was monitoring the situation. ‘As you would expect for an issue of this scale and complexity, we have considered a number of options and continue to do so. PPI is an on-going and high-profile issue and we are monitoring it closely.’

10 comments so far. Why not have your say?

Chris Clark

Jan 16, 2013 at 16:41

Perhaps they could be told 2113?

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Jan 16, 2013 at 16:52

Probably a good idea. I suspect banks have paid out to almost anyone who has asked so it's possible people are claiming money they didn't spend.

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Jan 20, 2013 at 09:23

when you are sold an oven that is supposed to be run on gas, rather than the electric one you needed, the shop that sold it is responsible (in all but the most stupid of customer cases) for correcting the mistake.

why can't the banks correct the mis-selling?

after all it took the banks about five minutes to commit the fraud!

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Mark Lance

Jan 20, 2013 at 09:56

This is because they would have to give back the 40 billion back + interest that they took, which they don't want to. All along they could have sent money back to clients but choose not too.

They have already given more back then they intended , which is why most banks are now calling clients on reviewing their case and grilling them on the phone before turning down up to 80% of claims.

Confidence in the Fsa controlling banks, ha , that's a good one that should go in next yrs christmas crackers!!

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Jan 20, 2013 at 10:17

wow..£40 billion? I had no idea it was this much. You are on to something big; now whose responsibility is it to prove that £40 billion number and act on behalf of individuals who have been stolen from?

because that is what it is, it seems to me..just because it is money and not property does not make it any less THEFT.

bank staff and banks shareholders (owners) are the ones that should go to jail and return these funds.

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Mike R

Jan 20, 2013 at 11:35

Well it is certainly a lot of hindsight from the FSA who should have spotted this during the many years that it was taking place. And of course the real beneficiaries are the claims Farming companies, while the tax payer bails out the banks and then subscribes heavily to these companies. At the same time the Financial Ombudsman system is overloaded.

Sounds like a UK system to further stall Bank lending and some prospect of UK economic recovery. After all it is mainly the Govt(taxpayer). owned Banks who are now footing this bill.

I am not suggesting that the PPI mis selling was wrong. Only that it remained undetected and the current spiral of compensation is also hitting a swathe of the wrong people.

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Chris Clark

Jan 20, 2013 at 11:50

@Mike R The real beneficiaries are actually the ones who were mis-sold to the tune of £40bn getting their money back. I do not believe the public will respond in any way sympathetically to this suggestion that stopping the PPI now will boost the economy in due course.

Even if it might be true.

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Jan 20, 2013 at 14:40

behind very PPI misselling lies a loan; behind every loan lies an application; behind every loan application lies a bank officer; behind every bank officer lies a loan manager, then general manager then the operating executive of a bank, then the bank, then the shareholders.

the loan officer is the thief acting on instructions from a hierarchical gang lord/styndicate chief, who gets a massive salary and a fat bonus for "results", awarded by independent remuneration committees and a whole bunch of shareholders waiting for fat dividends.

if this was individual extortion by a gang and the gang was caught,red-handed, the gang leaders would get the heaviest sentences, but all gang members would go to jail and pay fines or have their assets confiscated.

if the size of the problem is £40 billion, and the fines thus far meted out are just a few billion pounds, the banks and all others in the chain are literally laughing all the way to the bank, with the approval od the FSA (whose staff are presumably also getting fat salaries for not doing their job.

the £40 billion needs to be returned, without any effort by the victims, by the banks and loan officers and a punitive fine IN EXCESS OF THE MISSELLING needs to be paid by the banks shareholders.

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Mike R

Jan 20, 2013 at 15:21

Well Hooligan-- the shareholders at the moment for two of the Banks are to a very large extent the UK taxpayer who bailed them out for reasons other than mis selling. And yes you are right the FSA failed.

Also how big a scam has been generated by Claims Farmers with respect to false claims and even repeat textings to members of the public who have not been sold a PPI. Some of these Farmers are also walking away with tax payers money, to the tune of a lottery win. It is not too late to bring whats left under control, for genuine claimants.

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Jan 20, 2013 at 16:23

i have lost count of the number of calls i get every day plus the emails. i guess if a crime goes unpunished it must be legalised theft and players in the market from the fsa, through the banks (who incidentally won't be paying any tax any time soon, other than the personal taxes earned by gang members and the gang leaders) and staff who serve corrupt managers and shareholders.

i extend this point on banks, we do not own banks, they wriggle out of our graps and hide their cash flows at every opportunity.

what mechnism is there to prosecute crimes if the people we have hired, Serious Fraud Squad, FSA, OFT and various parliamentary committees and all MP's dont think a sufficiently heinous crime has been committed!

I bet if supermarket theft increased to 20% of sales, or fare dodging the same, or window smashing ...but then that would be individuals not banks.

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