Britain’s financial regulator’s view on how complaints about mis-sold loan insurance are being handled and what action it plans to take will be announced by the end of the summer, it said yesterday.
The Financial Conduct Authority said in January that it would collect evidence on whether consumers mis-sold payment protection insurance (PPI) were being compensated properly and use it to assess whether the current approach was working. It said it would consider imposing a deadline on customers claiming compensation, potentially drawing a line under the UK’s costliest consumer finance scandal.
The authority said yesterday that it is considering whether additional rules or guidance about PPI compensation are required after the UK Supreme Court ruled in November that a failure by lender Paragon Personal Finance to disclose to a client a large commission payment on the sale of a PPI policy has made the relationship between lender and borrower unfair.
Banks have so far set aside more than £26bn to compensate customers mis-sold PPI policies.
The insurance policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to those who would have been ineligible to claim.
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