Many firms mis-sold British consumers payment protection insurance (PPI) in the past years. Now firms begin to contact consumers who may have been mis-sold a policy but have not yet complained.
The British Financial Services Authority seeks to support this process by putting forward proposed guidance for firms outlining the steps they should take in contacting consumers.
The proposed guidance sets out the FSA’s expectations that the letters should be clear, fair and not misleading, and include a clear explanation of the following:
- that the letter contains important information and should be read carefully;
- that the customer may have been mis-sold;
- the specific failings that led the firm to believe the customer may have been mis-sold;
- that the customer may have suffered a financial loss and could be entitled to redress; and
- that the letter requires careful and immediate consideration and there is a time limit for making a complaint.
Martin Wheatley, FSA managing director, commented: “This is important guidance and marks a key moment in the story of PPI. So far the majority of payouts have been for complaints received before, or put on hold during, the judicial review. However, we are now beginning to see firms considering how to treat customers who were mis-sold but have not complained. We think that the redress due from this process may well exceed what has been paid so far, and that is why we are acting now to clarify our expectations.”
For more information: www.fsa.gov.uk/library/communication/pr/2012/021.shtml