Confederation of British Industry director-general John Cridland called for authorities to set a time limit on reclaiming payment protection insurance. He states that while it is proper that customers should get their refunds being mis sold the insurance, all customers by now should know that they have been mis sold the insurance policy.
The CBI focused on claims management companies, an industry worth £3 billion, for aiding customers in making their claims for mis sold PPI. Cridland mentioned that the entire claims process only makes the claims management companies gain abusive profit in the process.
However, claims management companies, such as PPIco.org, say that they are only “helping hands” to customers. There is a difference between CMCs who “Cold-call” their customers and ask for upfront fees and reputable CMCs who would only be paid if they perform their job well. CMCs also state that they are only doing the job that banks were supposed to do in the recent years.
In 2011, the Financial Services Authority called upon banks to write to customers who are potentially mis sold PPI to make a claim. However, banks did not properly implement the said instruction. With still many customers unknowing that they were ineligible for their insurance, claims management companies sprung up everywhere. Each one is monitored by the Ministry of Justice.
Cridland states that the money banks give for PPI claims can be used for other economic problems aside from PPI mis selling. The proposal gave a deadline for payment protection insurance claims for at least six years.