Banks left disappointed as PPI deadline pushed back

It had originally proposed a spring 2018 cut-off for claims and news of the longer time period saw shares in banking groups slump as the PPI scandal has already been the costliest yet for the financial services industry at well over £30 billion and weighed heavy on many major lenders bottom lines.

The FCA wants the rule for setting the deadline to come into force by the middle of 2017 alongside a public awareness campaign.

The FCA will listen to feedback on this and other proposed changes before its consultation closes on 11 October.

Banks have so far paid out £24bn in compensation.

The five biggest banks in the UK have set aside £32.6bn to deal with the total compensation bill.

Andrew Bailey, FCA chief executive, said: “Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity.

“We have listened to all the feedback we have received and believe that the steps we are taking are the right ones.

“We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers.”