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FCA finally publishes PPI complaints rules and guidance - TLT LLP complaint definition fca

FCA finally publishes PPI/Plevin complaints rules and guidance Insights & events > Insights > FCA finally publishes PPI complaints rules and guidance 06 March 2017

On 2 March 2017 the FCA finally published its PPI Policy Statement (PS17/3), which includes finalised rules and guidance on payment protection insurance (PPI) complaints and Plevin. The PS completes the PPI consultation process which began in November 2015. We set out below the key points and the dates to remember. 


The PS sets out the way forward:

A new rule that sets a deadline by which consumers will need to make their PPI complaints or lose their right to have them assessed by firms or by the Financial Ombudsman Service (the FOS). This deadline is 29 August 2019.  An FCA led communications campaign designed to tell consumers of the deadline. This will begin when the deadline rule comes into force on 29 August 2017.  There will be a new fee rule on 18 firms which will fund the consumer communications campaign. This will come into force on 31 March 2017, with the first half of the fee collected one month later.  A set of new DISP rules and guidance on the handling of PPI complaints in light of the Supreme Court's decision in Plevin. These come into force on 29 August 2017.  Key points to note  Key changes from the last Consultation Paper (CP16/20)

Firms that sold PPI must write to previously rejected mis-selling complainants who are eligible to complain again in light of Plevin and explain they can make another complaint.  Firms must not apply the deadline to future complaints which concern a rejected claim on a live PPI policy, if the claim was rejected for reasons connected to the sale, such as ineligibility, exclusions or limitations.  To give firms more time to prepare to implement the FCA approach, and the FCA more time to supervise the preparations, the rules surrounding Plevin will come into effect at the same time as the deadline rule – not three months before as originally planned.  Advertising Campaign The campaign will run across multiple channels, including advertising, partnerships and PR activity. All communications will signpost consumers initially to the FCA's PPI website or to the FCA's PPI helpline.  The PPI website and helpline will offer consumers all the information they need to make a decision on whether to check or make a complaint about PPI.  Profit Share The FCA has made the decision to include (like it proposed) profit share in the definition of commissions. Undisclosed profit share commission will be treated exactly the same as undisclosed commission.  The provisions on profit share are detailed.  In summary, the FCA expects firms to assess whether the commission rates which it knew or could reasonably foresee at the point of sale (plus anticipated profit share) was, for a single premium PPI policy, more that 50% of the total amount paid by the consumer for the policy, or, for a regular premium PPI policy, was at any time in the relevant period or periods, more nehfpyyt. us digital millennium copyright act definition than 50% of the total amount paid by the consumer for the policy for the relevant period or periods. Redress 

The FCA's approach includes a 50% commission 'tipping point' at which firms should presume that the failure to disclose commission gave rise to an unfair relationship.  There has been a slight change to the final approach to redress. Any decision by the seller (at Step 1) to pay redress (on the basis that, but for the sales failings, the complainant would not have bought the PPI they bought) extinguishes any claim for redress the consumer may have at Step 2 (concerning undisclosed commission). This is so even if the Step 1 redress paid is less than the full return of premium (because, for example, it was alternative redress or reduced because of a previous successful claim on the policy). It is also the case whether the seller and lender are different firms or the same. Where a firm concludes that an unfair relationship under section 140A has arisen as a result of the undisclosed commission, the firm should pay redress consisting of 3 elements – (1) the difference between the commission actually paid and 50% of the premium paid, plus (2) the historic interest the customer has paid on that proportion of the premium (where relevant), plus (3) annual simple interest at 8% on both these sums.  Exclusions  Given the complexities of assessing a McWilliam-type complaint, and the fact that the legal remedy for such a complaint would be different from those of the FCA's DISP App 3 rules and guidance for PPI complaints, the FCA has agreed that these complaints are best treated outside of DISP App 3.  Complaints about PPI Policies sold after 29 August 2017 are not subject to the deadline.  Next steps and key dates  Until the final rules and guidance on PPI complaints and Plevin come into force, firms will still be able (under the existing FCA complaint-handling rules) to explain to a complainant that they cannot yet provide a final response for complaints that could be affected.  When the final rules and guidance on PPI complaints in light of Plevin come into force, the FCA says they will expect firms to provide fair and prompt final responses to complaints they have put on hold.  The FCA will adopt a robust supervisory engagement with firms, including continuing to monitor and challenge them to ensure that they deal fairly and promptly with complaints and are cooperating with the FOS.   These dates are subject to any judicial review.  We understand that some large claims management companies have already obtained Counsel’s opinion on the prospects of a judicial review.

For further advice and further information, please do not hesitate to contact a member of our team.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions .

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Making a complaint

The Exchange's role in the general regulatory framework

The legislation which now governs the conduct of investment business in the UK is the Financial Services and Markets Act 2000 (FSMA) which came into force on 1 December 2001, superseding the Financial Services Act 1986. The statutory body with overall responsibility for enforcing the legislation relating to investment business under the FSMA is the Financial Conduct Authority (FCA). The Exchange is a Recognised Investment Exchange within the terms of the FSMA and is regulated directly by the FCA.

With the implementation of the FSMA, all the previous dispute resolution schemes for investment business, banking services, and insurance were amalgamated into a unified scheme, the Financial Ombudsman Service (FOS) which, although set up under the FSMA legislation, is independent of the FCA.

With minor exceptions (see footnote to this page), each firm which carries out investment business must be authorised to do so by the FCA. Such firms include stockbroking and other member firms of the Exchange, investment and fund management companies, insurance companies and pension providers, independent financial advisers, solicitors, accountants and actuaries carrying out investment business (but see below).

As from May 2000, the function of the UK Listing Authority (UKLA) was transferred from the London Stock Exchange to become a division of the Financial Services Authority (now the FCA).

The interests of shareholders during takeovers fall under the remit of the Panel on Takeovers and Mergers, a non-statutory body independent of the Exchange and the UKLA.

Footnote - the exceptions refer to firms of solicitors, accountants and actuaries which have elected not to be authorised for investment business by the FCA. The business carried out by such firms is restricted in scope and must be incidental or purely complementary to the professional services provided by the firm. Such firms are not directly regulated by the FCA, but by the relevant Designated Professional Body (Law Society or Institute/Association of Chartered Accountants or the Institute of Actuaries). These Designated Professional Bodies are themselves in turn accountable to the FCA in relation to the investment business carried out by the firms they regulate.

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Complaints Handling Rules & Reporting The FCA has recently issued a statement revising the Complaints Handling Rules and that affects all regulated financial services firms in the UK.

July 2015

The FCA has recently issued a statement revising the Complaints Handling Rules ( PS 15/19 Improving Complaints Handling )

A Brief Overview of the changes as follows: The period during which firms can deal with complaints informally is extended from one to three days. Firms will also need to send a written summary of any resolution communication to the client. Firms will now need to report data on ALL complaints every six months (including informal ones) Complaint data will be made public by the regulator Premium rate call charges for customers will be banned In addition, the categorisation of complaints has changed to make it clear whether unsuitable financial advice or unclear guidance is the cause of a complaint.

What this means for Firms: Every six months effective from 30th June 2016, firms will need to submit a complaints return to the FCA for their products and services across the revised list of complaint categories.

For those firms that have less than 500 complaints to report then there will be a shortened complaints form that can be completed. In addition, should a firm have no complaints to report , as the FCA anticipates will be applicable to a significant number of smaller firms, then a Complaints Handling ‘ Nil Return’ will be required to be submitted.

The new Complaints Form can be viewed here , however we anticipate that the regulator will make reporting available for electronic submission nearer implementation.

Timeline to Complaints Handling Implementation: 26th October 2015: The rules on call charges for consumers will come into force. 30th June 2016: The following rules come into effect: o extending the informal response period to three business days;

o requirement to send a summary resolution communication ; and

o new rules on complaints reporting.

30th September 2016: Complaints report data expected to be published by FCA (and then published by the regulator every six months thereafter) Complaints Reporting & Compliance Support Between now and the 30 June 2016 when the new Complaints Handling Rules come into play, all regulated firms should have reviewed and revised their Complaints processes and procedures.

Under the new FCA rules, firms will have a greater opportunity to resolve complaints to the customer’s satisfaction first time. With trained staff and the right processes in place to ensure complaints are well- handled, these can go towards strengthening your client relationships.

If you should like support or assistance in reviewing your complaints handling processes or are unsure of your Complaints Reporting requirements, please get in touch with our compliance support team. Simply call or drop us an email as we’d be delighted to discuss any requirements you might have.

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Complaints Reporting Support If you should like support or assistance in reviewing your complaints handling processes or are unsure of your Complaints Reporting requirements, please get in touch with our compliance support team. Simply call or drop us an email as we’d be delighted to discuss any requirements you might have.

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