Six Year Limit on PPI Complaints Needs to Be Changed

Concern about the  mis-selling of Payment Protection Insurance  and other financial products is increasing.  The number of complaints to the Financial Services Ombudsman  has risen dramatically in the past year – but they are still on a much smaller scale than in the UK.

In the last 6 months of 2012 the Financial Services Ombudsman  had a 216% increase in complaints about missold Payment Protection Insurance (PPI) compared to 2011.

We have written before about the ongoing Review of PPI in Ireland ordered by the Central Bank because of concerns about the misselling of policies.  Not much seems to have happened with that – it has gone very quiet .We also wrote about the €4 million of PPI refunds that have already been given in Ireland by AIB and BOI.

Even though the number of PPI complaints in Ireland has risen – the number of complaints upheld is still very low. There were 1280 complaints in 2012 made to the Ombudsman about Payment Protection Insurance . Only 86 were fully investigated and only 7 of these were upheld fully and 12 partly.
The ombudsman closes many complaints before investigation – in cases where they get no further contact  or where the complaint is settled or withdrawn. In manyof the  cases (figures not available) – the Ombudsman can’t investigate the complaint because   under current Irish law, the Financial Services Ombudsman may not investigate a matter which occurred more than six years before the complaint is made.

This six year limit is very unfair – especially  in cases where the person may not have even realised they were sold PPI or they didn’t realise they couldn’t make a claim on it until many years later.  The six year rule is obviously unfair in the case of other longer term financial and investment products such as endowment mortgages .
In the UK things are more sensible – people in the UK must complain to the ombudsman within six years of the sale of the PPI , or within three years of  first becoming aware that they may have grounds for complaint.

The matter of the six year limit in Ireland was raised in the Dail in 2013  by TD Clare Daly who asked the Minister for Justice and Equality  Alan Shatter about ” his plans to reform the statute of limitations so that claims can be made against financial institutions that mis-sold financial products.”

In his answer – Alan Shatter pointed out that the statutory functions of the Financial Services Ombudsman Council included  keeping under review  the efficiency and effectiveness of the Office of the Ombudsman and advising “the Minister for Finance, either at the Minister’s request or at its own initiative, on any matter relevant to the Ombudsman’s operation”.

He went on to say that it was open to the FSO Council to make any relevant  recommendations to the Minister for Finance concerning changes to the  6 year limitation period. He told Ms Daly that she would need to ask the Minister for Finance   whether or not such matters have so come to his attention.

Minister Shatter didn’t say anything definite about planned changes to the statute of limitations law. He just mentioned that  The Law Reform Commission  made recommendations ” in relation to the limitation period applicable to contract law which could have a bearing on the misselling of financial products .”
He finished by saying that   “ I will be happy to take account of these recommendations and of the Deputy’s concerns in any proposals for legislation that I may develop on periods of limitation in the future, while also taking account of any relevant developments in policy that may take place between the Office of the Financial Services Ombudsman, its Council, and the Minister for Finance.”

A quick check on the FSO website tells you that these are the members of the FSO Council – so maybe these people might be able to persuade the Minister for Finance to change the rules on the 6 year limit so that consumers can get refunds and compensation for missold PPI and other products?

Dermott Jewell Chairperson ( also CEO of the Consumers’ Association of Ireland)
Michael Connolly ( Consultant)
Paddy Leydon (Bank of Ireland )
Tony Kerr ( UCD College of Business and Law)
Caitriona Ni Charra (MABS)
Frank Wynn (Irish Life & Permanent plc)

2 thoughts on “Six Year Limit on PPI Complaints Needs to Be Changed

  1. Hi,

    We lived in Ireland and purchased a property but was informed by BOI that we required insurance. It was not an option but something we had to have to secure the mortgage. However, when I complained the response received was less than adequate and BOI put the blame on Irish Life and vice versa. I approached the Ombudsman but was informed of the 6 year rule, despite it only being a few months over the rule, the ironic thing is, if I had raised the complaint initially with the ombudsman, I would have been in time. It is interesting to note that two of the members of the Ombudsman Council are also members of the insurance company and Bank that I raised complaint with- How can they be objective in their decision regarding the 6 year rule. It is obvious that most people took out loans in the celtic tiger years which was pre-2007 and this in itself will deter the ombudsman from changing the ruling as it will open the flood gates!! Those council members who are affiliated with the organisations that miss- sold PPI are compromised and effectively incapable of making a decision that is fair and reasonable for the victims of this scandal.

    • Hi Caron
      Was this payment protection insurance or was it mortgage protection insurance (life insurance)?
      It probably doesn’t matter now anyway because it’s over 6 years ago.

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