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The banks will have to write millions of letters to all those customers who may have been mis-sold a policy but have yet to complain, and may not have even thought of doing so until they get the letter. The customers will need to respond to the letters in order to make a claim for compensation. The FSA expects banks to write a total of anything between four million and 12 million letters to customers who might have been affected. The FSA says that the letters should be jargon-free and contain no marketing material. They must 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. As well as providing guidance on the content of the letters, the FSA is also clarifying when and how firms might decide that a complaint is ‘time barred’. Normally, customers have six years from a sale to complain or, if later, three years from when they became aware (or ought to have become aware) that they had cause for complaint. When a complaint is made outside this limit, the firm is no longer obliged to consider it and can reject it. The Financial Ombudsman Service may also dismiss a complaint made outside these time limits. Martin Wheatley, FSA managing director, said: “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.” He added: “The British Bankers’ Association and Association of Finance Brokers have both indicated their strong support for the guidance, and – along with consumer group Which? – have also been in discussions with the FSA to try and reach agreement on how best firms can communicate with affected customers, both in the context of these contact exercises and PPI more generally. These are encouraging moves.” Last year, PPI cost £1.9bn in redress. An estimated 16.1m PPI policies have been sold since 2005, with an estimated value of £17bn. The estimated total value of PPI policies sold between 2001 and 2004 is £16.9bn. Introducer Today one of the fastest growing News Website provides all the Latest News of UK, Breaking News, Latest Updates, News Headlines, Mortgages and Real Estate News. It was set up to develop websites and offer clients within the Mortgage Intermediary market an on-line solution to Advertising and Marketing through the web.
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