Up to date, around £20 billion has been paid out to 10 million customers as compensation in the wake of the Payment Protection Insurance (PPI) mis-selling scandal.
The PPI policies were designed to protect customers of finance products, such as loans, but were often inappropriate for those that they were sold to. As a result millions of people filed claims against their lenders, which has also caused a sudden growth of claims companies who adopt a more aggressive approach to seeking compensation for their clients.
Current reports state that the Financial Conduct Authority (FCA) has confirmed that it will run a consultation on putting a deadline in place for future claims. It the proposals go ahead, it's expected that they could take effect from spring 2016, with the deadline set about 2 years afterwards, sometime in 2018. So, remaining customers who were mis-sold PPI will still have time to make their claims before final line is drawn under the scandal.
The move seems to stem from pressure the regulator has faced from the banking industry, who insist that the resultant claims companies and their 'sales' approach, has led to many bogus claims from customers who wouldn't normally have applied for compensation.
Since the announcement, shares in Lloyds Bank, who were the worst offender and has paid out billions in claims, have risen by nearly 3% in early trading. With share prices also rising across all of the major lenders. RBS shares rose by nearly 2%, whilst both Barclays and HSBC shares rose a little over 1%.
The FCA said that a deadline would “bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector.” In order to reach a fair end-point, the regulator also said that there would be an advertising campaign to promote the deadlines, thus prompting any outstanding claims to be brought forward.
If you're thinking of submitting a claim, or wish to know more on qualifying claims, make sure you check out our dedicated guides to help you do just that.