To encourage consumers to decide whether to act about PPI before the cut-off, the FCA will run a two-year consumer communications campaign, which will be launched in August 2017.

Andrew Bailey, FCA chief executive, said: ‘Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off. We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.’

The FCA has also made final rules and guidance related to how firms should handle complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance Ltd (Plevin). The Plevin decision means that consumers may have new grounds to complain about PPI regarding the amount of money that the providers received for the sale if the failure to disclose that commission made the relationship unfair.

As proposed, the FCA’s approach includes a 50% commission ‘tipping point’ at which firms should presume, for handling PPI complaints, that the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission. Redress will be calculated as the excess commission over the 50% tipping point.

The FCA will also require all firms to write to previously rejected complainants who are eligible to complain in light of Plevin in order to explain the new basis for complaining to them.

Consumers with live PPI policies will now be able to complain after the deadline if they have a future claim on their policy rejected for reasons related to the sale. The complaint must be related to the reason the claim was rejected, for example, eligibility, exclusions or limitations.

Complaints about PPI policies sold after 29 August 2017 are not subject to the deadline.

The rules surrounding Plevin will come into effect at the same time as the deadline rule – not three months before as originally planned, which the FCA says will give firms more time to prepare.

The regulator has pointed out that the complaints handling rules already set time limits for consumers to make complaints about financial products. These time limits are generally six years from the event the consumer is complaining about or, if later, three years from when the consumer knew, or could reasonably have known, they had cause to complain.

In the case of PPI, because many consumers did not know they had been mis-sold PPI, these time limits may not yet be triggered. However, consumers who have previously been informed of this by their firm (for example, through a letter) may be out of time earlier than 29 August 2019. Some consumers who have made a claim, or attempted to make a claim, on their PPI may also be out of time earlier, although this will depend on the facts of the case.

The FCA’s Payment protection insurance complaints policy statement is here.