Originally published by Out-Law.com

The 2019 deadline for complaints related to mis-sold payment protection insurance (PPI) is driving up the number received by firms, which have increased to their highest level in more than four years.

Regulated financial firms reported 3.76 million complaints to the regulator in the second half of 2017, of which 1.55 million involved PPI, according to the Financial Conduct Authority (FCA). The overall number of complaints received was 13% higher than the number reported in the first half of the year, while PPI complaints increased by 40% over the same period.

Firms paid out a total of £415.8 million in compensation in January 2018 to customers who had complained about PPI, taking the amount paid since January 2011 to £30 billion, according to the latest figures. Firms paid out more compensation in January than in any month since March 2016, the FCA said.

A two-year campaign urging consumers to "make a decision" about whether to claim compensation for mis-sold PPI began in August 2017. The campaign, which is being paid for by the 18 financial firms who reported the majority of mis-selling complaints, will consider of TV, cinema and online advertising and outdoor billboards, and will run up to the claims deadline of 29 August 2019.

This 'longstop' deadline for PPI-related complaints does not apply to consumers whose complaints are already time-barred by virtue of the usual statutory limitation period.

Financial services contentious regulatory expert Jonathan Cavill of Pinsent Masons, the law firm behind Out-Law.com, said that although firms would be "happy that the end of the PPI mis-selling saga appears to be in sight, the increase in complaints would make things difficult for them in the short-term."

"In previous articles, we had commented how the PPI longstop date and associated FCA advertising campaign would bring a reciprocal increase in PPI complaints," he said. "This has rung true. We are also aware that many firms have felt the impact of the increased velocity of complaints on their complaints-handling teams and wider businesses."

"The FCA has taken a particular interest in firms which have found it challenging to handle the increase in PPI complaints, and reminded them in no uncertain terms of their continued regulatory obligations in this regard. Importantly, we have also seen claims management companies and customer-side law firms bringing new and innovative complaints and claims in this period, along with their standard mis-selling allegations," he said.

Excluding PPI, firms received 2.21 million complaints in the second half of 2017, around 13,000 fewer than in the previous six months, according to the PPI data. Current accounts were the next most complained-about products after PPI, with 509,047 complaints; followed by credit cards, with 314,586 complaints.

"Outside of PPI, the published data indicates that firms are receiving around the same number of non-PPI complaints as they have previously," Cavill said.

"Due to the PPI advertising campaign, firms should consider that customers are becoming more aware of their rights to complain both to businesses and to FOS for non-PPI complaints generally. Because this increase in customer awareness, we can expect that in the future there is the potential for non-PPI complaints to increase off the back of this," he said.

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