Threat of PPI deadline

Bank customers who were mis-sold Payment Protection insurance with loans and credit cards could find that a deadline is imposed to restrict their ability to put in a compensation claim.

The financial watchdog, the FSA, has confirmed that it is considering a request from banks to introduce a time limit on claims for PPI compensation.

But it said in a statement that "Our key priority is to ensure consumers are protected, so the FSA Board would need to be convinced that any proposals would be in the interests of consumers."

It is understood that the British Bankers Association is pushing for a cut-off point in May next year.

Normally, victims of mis-selling can make a claim within 6 years of the event, or within three years of becoming aware of the problem.

Banks have set aside nearly £13bn to pay compensation. The bank of England has warned that the huge sums involved are affecting the banking industry's ability to lend. In exchange for a time limit on claims, banks would fund an advertising campaign to ensure people understood their options.

However, the FSA said there would be no rule change without a full public consultation.

FSA Statement on PPI

The Financial Services Authority (FSA) has been approached by the British Bankers' Association (BBA) to discuss the potential for introducing a time limit for Payment Protection Insurance (PPI) complaints - if the banking industry funded a sufficiently widespread advertising campaign to ensure consumers are aware of the PPI issue and how to complain.

Our key priority is to ensure consumers are protected, so the FSA Board would need to be convinced that any proposals would be in the interests of consumers.

We have had initial discussions and are prepared to consider the merits of this and other options. A key consideration will be the potential to get compensation to more consumers, more quickly.

We will continue to hold discussions with the BBA as well as actively seeking the opinions of consumer groups and other stakeholders.

However, no changes to existing FSA, or future Financial Conduct Authority (FCA), rules would take place without a full public consultation.