Time barring PPI complaints

In its Policy Statement 10/12 on "The assessment and redress of Payment Protection Insurance complaints" published in August 2010, the FSA was quite firm that the publicity about PPI mis-selling, which, even then, had been very significant, would generally not be enough for a firm to reject a PPI complaint without consideration of its merits  on the basis that it was made outside of the relevant time limits (and for the firm to object to the FOS considering such a complaint). 

The FSA's view was that "for a customer to be aware for the purposes of starting the three year time limit running for a potential PPI mis-selling complaint, they would need to have become, or been made, aware of both a potential problem with the sale of their policy and potential financial loss resulting from that" (footnote 34 – emphasis added).

Some progress has been made on this front in FSA guidance published on 13 July 2012, "Payment protection insurance customer contact letters - fairness, clarity and potential consequences". One of the "consequences" of sending a customer a contact letter (CCL) compliant with this guidance is that the customer who receives it "is likely to have received sufficient awareness to trigger the start of the 3 year time limit (if it has not already begun) for bringing a complaint about the mis-sale of the policy as a result of any of the key sales findings set out in the PPI CCL" and possibly about the mis-sale of the policy more generally.

There are criteria set out in the guidance which should be assessed before a complaint is rejected without considering its merits on the basis of the CCL, for example whether the complainant received the PPI CCL and whether there are exceptional circumstances - the first of which at least may be difficult to prove in practice.  Nonetheless, provided FOS too is inclined to adopt this approach (and the FSA suggests it may do so, although does not commit), there may at last be some prospect of an end in sight for firms facing PPI complaints.

Interestingly, for PPI but also more generally in relation to complaints, the FSA's wording in brackets - "if [the 3 year time limit] has not already begun" - suggests that there may be other instances where the limitation period has started -  i.e. the CCL is not the only way in which a customer may have become aware of the potential problem and resultant potential loss thus triggering the start of the limitation period.