Consumer champion Which? tells the Financial Conduct Authority (FCA) that its plan to resolve all PPI claims by 2018 is ill-judged.
It warns that banks have ‘little incentive to pay out compensation swiftly and directly to consumers in any future mis-selling scandals.’
Last October 2015, Interim FCA CEO Tracey McDermott had proposed that 2018 be the deadline for PPI claims.
This was part of the government’s plan to alleviate the ‘bank-bashing’ by hard-line former FCA CEO Martin Wheatley.
According to Which? and MoneySavingExpert.com, banks were being given “undue relief” for a problem that they were the cause.
Which? said in a statement:
“A two-year time limit would result in banks having little incentive to pay out compensation swiftly and directly to consumers in any future mis-selling scandals”.
The consumer body added: “It is clear that banks should do more to make their processes for handling PPI complaints simpler and fairer.”
The FCA had called for firms to publish their plans to handle claims and how they have handled claims until 2016. This would include the amount of redress outstanding and how the FCA will judge the success of its proposed time limit.