Arnie to front FCA’s PPI deadline campaign, but why is there a deadline in the first place?

Listen up, regulators, the agent’s said yes! We’ve got Arnie! Now we can terminate anyone who says a job in financial regulation is boring when we’re boozing in Canary Wharf’s bars!

Yes, Arnold Schwarzenegger is back (in the UK). He’s been hired by the Financial Conduct Authority to front a campaign aimed at raising awareness of the deadline to submit claims for payment protection insurance (PPI) misselling compensation.

Goodness knows how much his involvement is going to cost, but who cares? The banks that sold PPI are funding it, after all.

Here’s why it matters: Those banks have for years been lobbying hard to say “hasta la vista baby” to a problem that is entirely of their own creation. They’re not going to complain about Arnie’s involvement, even if it does cost a cybernetic arm and a leg, because after 29 August 2019, the PPI problem will be terminated and they’ll get to keep any ill-gotten gains left over after that point.

They will also be able to use another of the phrases made famous by the actor in his career defining role if anyone knocks on their door brandishing a worthless PPI policy. The one starting with the letter F. You may remember it.

“We want to encourage people to decide whether to find out if they had PPI and whether to complain or not. Our message, and Arnie’s, is ‘do it now’ and I urge people to make a decision before the deadline on 29 August 2019,” Andrew Bailey, the chief executive of the FCA, said as the news of the actor’s participation was announced.

As the price for calling last orders, he has demanded some concessions from the banks, it is true.

In the run-up to the deadline, they will be expected to provide “useful and free-to-use PPI checking processes” and offer customers the ability to submit complaints online.

Forms are, we are told, going to be easy to understand, and support will be offered to vulnerable consumers who might need help with them.

Today also marks the start of a new basis for complaining about PPI. Customers could be entitled to compensation even if they were not missold and even if a previous complaint was rejected, if their bank earned a high level of commission from the sale.

The watchdog has further established a phone line to help deal with punters’ questions.

It all looks marvellous, doesn’t it. The FCA getting tough and playing PPI Terminator at last.

But it raises a nagging question: given that PPI was about as blatant a rip-off as the banking industry has ever come up with, why wasn’t all this stuff done much earlier in the process? And why does the campaign’s belated establishment only come now there is a deadline for submitting claims?

Given the work that the regulator has had to do on the subject, not to mention the problems it has caused for the Financial Services Ombudsman, which has been positively swamped with PPI claims, you can understand why the official bodies are almost as keen as the banks to get this done with.

However, that doesn’t make it the right thing to do.

The fact is, if a bank has ripped you off, the onus should be on it to make restitution, not on you to complain within a set time period. The deadline inevitably means some people will miss out on compensation they should be due. It also sets a dangerous precedent. If it’s good enough for PPI, why not do the same thing with the next dodgy product?

The helplines, simple forms, and the ad campaign featuring Arnie all serve as window dressing to paper over the central issue: the banking industry is being let off a hook that it has been hanging on for years and should remain on until all those who were ripped off have been put right.