LONDON (Reuters) - The animatronic head of actor and former California Governor Arnold Schwarzenegger mounted on tank tracks urges consumers to “make a decision”, in a campaign launched on Tuesday to raise awareness of Britain’s costliest consumer mis-selling scandal.
The Financial Conduct Authority (FCA), Britain’s financial services regulator, has set a deadline of Aug. 29, 2019 for people in Britain to complain about Payment Protection Insurance (PPI) they may have been mis-sold.
But the regulator estimates there are around 30 million policies that have not yet been claimed against. So far, around 80 percent of complaints made about PPI policies have been upheld, with compensation payouts averaging between 2,000 and 3,000 pounds, according to the FCA.
The campaign launched on Tuesday is aimed at helping people decide whether to make a claim or not, and could lead to a sharp rise in complaints and further compensation payouts by the banks, the FCA said.
“There were 64 million of these policies sold, this is industrialised mis-selling,” said Megan Butler, director of supervision at the FCA.
“As far as we can tell there are likely to be millions of people who may be owed thousands of pounds,” Butler told Reuters.
The campaign will run in cinemas, on television and online and will cost 42 million pounds, to be paid for by the 18 firms which had the most PPI complaints.
Butler said she would not speculate on what the upper number would be for the remaining compensation bill, but it will be “material”.
Some 12 million people have received compensation, which equates to 24 million policies, with complaints on another 4 million policies turned down.
Following the Supreme Court’s “Plevin” ruling, consumers can also claim for “excessive” commission paid on a policy, even if their mis-selling complaint on the policy itself was turned down.
Butler estimated that a million people could make such claims, but the amount owed is likely to be lower than cash being paid out for actual mis-selling.
Regulatory reforms put in place in recent years would stop such large scale mis-selling, which took place in the 1990s and early 2000s before the FCA was launched, from happening again.
“An awful lot of this dates back to an earlier period of regulation, and indeed no regulation,” Butler said.
New accountability rules which make people personally responsible for the design and distribution of financial products are already triggering changes in behaviour, she said.
Regulators have also turned their gaze to other areas such as car finance and people’s new ability to cash in pension pots.
Reporting by Lawrence White and Huw Jones; Editing by Adrian Croft