Posted: 11th July 2019

The day that countless firms were holding out for – and many claims management companies have been dreading – is fast approaching; the Payment Protection Insurance (PPI) time-bar will take effect on the 29th August 2019. How time flies!

But even now, with little more than a month to go until new PPI complaints can no longer be brought forward, there is still a laundry-list of items needing to be ‘ticked-off’. There are also plenty of potential PPI claims still outstanding, despite the fact that (according to the latest FCA figures) £35.3 billion has been paid out in redress since January 2011.

The FCA continues to push for more complainants to come forward, reopening its “Robotic Arnie head” campaign to remind customers of the pressing deadline and publicising a comprehensive list of firms believed to have sold PPI products. Other pressures for firms are coming from the actions of the Official Receiver as it chases redress owed to creditors.

So, with the end of an era almost upon us, what do firms need to be doing to ensure that the PPI project gets the send-off it deserves? And are they ready to manage potential spikes in complaints volumes in these last seven weeks before the time bar?

Firms need to remain ‘on the ball’ until the very last second of the deadline. There will, no doubt, be new claims coming in right up until that point and a (potentially) long tail-off as those last-minute cases – and those lingering, complex ones – are dealt with.

The Official Receiver is knocking at the door

There are countless complications to individual customers’ PPI stories. The firm that sold them the product may have since gone bust, or they themselves may have declared bankruptcy. In the latter case, creditors will see the compensation resulting from PPI claims sent to them through a mechanism called the Official Receiver.

The Official Receiver will ensure that claims made for PPI are either sent forward to creditors (in the case that the PPI was purchased before the person was made bankrupt) or let it pass to the entitled party if the mis-selling occurred after the declaration of bankruptcy.

A large UK consultancy has been appointed as the assistant to the Official Receiver, submitting PPI queries and determining if any redress is owed to creditors of bankrupt individuals. As such, this business will be, and already has been, reaching out to firms using the full extent of its reach. Firms are likely to be hit hard by this latest development in the PPI saga, as hundreds of thousands of new claims are suddenly being made in large, single instances.

Interestingly, the Official Receiver may be able to skirt some of the requirements that typical PPI complainants have to abide by. The Finance & Leasing Association (FLA) notes that the FCA does not believe that the Official Receiver's standing to complain is dependent on it having “grounds, supported by evidence, to consider that the individual was dissatisfied with either the sale of PPI, or the PPI policy itself”.

There has been concern that Official Receiver complaints might be handled more slowly or less effectively than customer-made complaints, or perhaps only after all others have been resolved on the assumption that they may be less time-critical. However, the FCA has stated that the Official Receiver will be under its own time pressures and that any complaints brought forward by them are expected to be handled as part of the wider PPI mix. This will hardly be an easy task if firms, like we have already seen, start receiving a year’s worth of claims in a single month.

Firms should start looking at their PPI caseloads and figure out just how many of these have been brought forward by the Official Receiver, then triage them effectively. In some cases, it might be necessary to bring in whole specialised teams to deal with this influx.

The case for increased operational resilience

Firms cannot ‘drop the ball’ at this late stage of the PPI journey. There will always be unexpected spikes and surges to contend with, and these will become all the more likely as we head into the final month. Who could have said, last year, that the Official Receiver would get so deeply involved with the help of a large consultancy? Who could have predicted, when the Official Receiver announcement was made earlier in the year, the sheer scale of the influx?

There is obviously a strong case for investing continuing operational resilience here. Firms need to be looking at ways that they can soften the blow of PPI surges, which can seem challenging from the outset. Thankfully, though, firms have plenty of options.

They could, for example, get in touch with specialists resourcing consultants who can deploy scalable contingency resource to support in surge scenarios. Having a trained, vetted and prepared back-up team ready to go – “off the shelf”, so to speak – would be a huge benefit to any firm. Time is running out, however, to implement this, so if your firm expects to see a spike, you should take action now.

Firms cannot forget, either, the physical space and technology considerations that compliment and empower the human element. PPI claims management can benefit greatly from robotic process automation that can help triage cases and deliver enhanced management information.

Still, even after PPI has all been wrapped up and put to bed (and the months of tail-off that will surely follow put behind us), there will be more challenges for firms to face, and more complaints to respond to. Firms could use these current spike periods to really test the resilience of their firm and use the insight gathered to inform future investment.

The PPI project, after all, has required businesses of all shapes and sizes to face a massive learning-curve. They should take advantage of that experience or, otherwise, let it go to waste.

Miles hall

Miles Hall

Client Partner