Events in 2015 have created a great deal of speculation around the future of PPI. Having lasted for over a decade will there be a final bluster as the PPI storm blows itself out? The prospect of a time bar, the ruling in favour of Plevin and a pending cap on commission for CMCs all seem to have the potential to create an increase in claims. However whether the prevailing conditions will actually make a difference is uncertain.
Research commissioned by the FCA gives some interesting insights to consumer attitudes toward PPI. The study carried out by ComRes helps to frame events and better understand the likelihood of a spike. With 50% of PPI holders yet to make a complaint there is still plenty of potential left in the market.
The time bar is still to be finalised with the interests of the consumer vs. those of the banks being hotly contested. A time bar would almost certainly be accompanied by a communication campaign from the FCA to notify consumers that they have a closing window for raising claims. The research indicates that Government prompts of this type are one of the most effective triggers of complaints so it is very likely that this would result in an increase. The time bar is also likely to achieve good media coverage also indicated as a key driver of consumer action.
Plevin appears to have had a positive impact on consumers’ intention to complain. Half of those who previously were either “unsure whether to complain” or “not intending to complain” said that they would now complain in light of the new ruling.
Claims Management Companies will almost certainly ramp up their efforts. Time bar means their opportunity is closing and they will want to maximise margins by bringing cases before any commission cap is imposed. Personally I have noticed an increase in calls that I have been receiving. However CMC calls are actually cited as the least likely specific trigger to make a claim so increased CMC activity may have a lower impact than imagined.
When the FCA publish the second half 2015 figures in March it will be interesting to see the trends and we wait with baited breath to see the outcome of the Time Bar.