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UPDATE 1-UK watchdog defers decision on deadline for PPI claims against banks
December 9, 2016 / 9:08 AM / 9 months ago

UPDATE 1-UK watchdog defers decision on deadline for PPI claims against banks

(Adds Bailey interview)

By Huw Jones

LONDON, Dec 9 (Reuters) - Britain’s financial services industry regulator has delayed its final decision on setting a deadline for consumers to claim compensation for being mis-sold debt repayment insurance.

Banks including Lloyds and RBS have collectively paid out 24 billion pounds ($30 billion) in what has become Britain’s costliest financial services scandal.

The Financial Conduct Authority (FCA) launched a consultation in August on whether to effectively set a mid-2019 deadline for people to make a claim for being mis-sold payment protection insurance (PPI), and was to decide by the end of this year on whether to proceed.

On Friday it said this decision has now been postponed until the first quarter of 2017, which could push back the final deadline for claims.

The FCA said it would make a further announcement some time in the first three months of 2017.

Any final decision would trigger a two-year countdown to the deadline falling to allow for a publicity campaign to be run and meaning it could affect the mid-2019 date initially indicated in August, leaving banks potentially exposed to claims for longer.

FCA Chief Executive Andrew Bailey said the watchdog has received a “complete array” of feedback to its August consultation, with banks wanting to move very quickly while consumer groups were pushing for much more time.

“It’s deeply technical and we have got to get it right. We would have loved to hit the schedule... We are not going to rush it,” Bailey told Reuters.

“It’s sensible to assume that the extra time we take between now and when we get it out broadly rolls onto the whole timetable.”

“If we try to compress some later part of the timetable, we would be taking risks with the process. It obviously affects a lot of people,” Bailey said.

Shares in RBS, Lloyds, Barclays and HSBC were all weaker in early trading, while the broader market was slightly firmer. ($1 = 0.7954 pounds) (Reporting by Huw Jones; Editing by Rachel Armstrong, Greg Mahlich)

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