The U.K. government should consider setting a deadline for bank customers to seek reimbursement for faulty payment protection insurance, the head of the country's biggest business lobby said Monday.
Writing in the Times of London, John Cridland, director-general of the Confederation of British Industry, said there is a real sense that the PPI scandal, which so far has led the U.K.'s banks to set aside more than 11 billion pounds ($17.5 billion) for customer compensation, is now playing into the hands of "ambulance-chasing claims-management companies," who innundate British consumers with text messages and phone calls inviting them to submit PPI claims on a no-win, no-fee basis.
"I firmly believe we now need to draw a line under PPI and I am urging the government to consider the introduction of a statute of limitations for all PPI claims, capping the time during which legal proceedings can be initiated," Mr. Cridland said.
"Such a move could be reinforced by the Financial Services Authority declaring that the point at which consumer awareness of PPI mis-selling is widely known has now been legally reached," he said.
PPI was marketed as an insurance policy for customers on their mortgage, loan and credit card payments in the case of sickness or job loss. Banks started setting aside money for redress last year, after accepting regulators' findings that many of the policies were sold to people who didn't need them, didn't know they had bought them or were ineligible under the terms of the insurance to receive payouts.
Uncertainty around the final bill for the industry has weighed on banks' share prices.
Newspaper website: http://www.timesonline.co.uk
London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320
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