By Nick Baxter
29th August 2017
 

Today sees the launch of the Financial Conduct Authority [FCA] two-year marketing campaign which is intended to bring an end to Payment Protection Insurance [PPI] claims by 29 August 2019.

The FCA campaign must deliver a lot, but will it? There are still billions of pounds owed to millions of consumers; many of who don’t even know PPI was added to their loans or credit cards.

How much has really been paid back, £13.5 billion?

It is generally accepted that PPI gross written premiums totalled £65bn. Clearly not all PPI was mis-sold, but it has been estimated that around 80% of it was. That means that around £50bn of premiums need to be repaid. Most recent FCA figures show that £27bn has already been returned to consumers. This might give the illusion of progress, but the £27bn of redress repaid to date incudes account and statutory interest. PFCA and independent analysis shows that account and statutory interest usually accounts for half of the redress amount. So only £13.5bn of the £50bn mis-sold premiums have been returned so far.

Judge the FCA success when £100b is repaid!

Adding account and statutory interest to the mis-sold amount means that the FCA campaign can only be judged as successful when its ‘returned to date’ figure reaches £100bn. We are woefully short of that figure……………as can be seen below:

PFCA Monthly PPI Payout

The PFCA estimates we are around a third of the way through this problem. Accordingly, the FCA campaign has to reach consumers that all the advertising spend of claims management companies over recent years has failed to reach.

Next steps:

PPI was like no other product, millions of consumers didn’t know it had been arranged alongside their product………………..and are still blind to that possibility. All consumers should take steps to check whether or not they have (or had in the past) PPI. Once the deadline has passed, it will be too late.

FCA adverts questioned!

Independent observers, who have seen the FCA adverts, are already questioning the lack of a call to action. To stand any chance of success, the FCA message needs to evolve over the next two years or the sums owed to consumers will never be repaid.

The PFCA will continue to issue a monthly update (PPI Payout). This will show how much of the current missing £73bn has been paid back.