DISP App 3.1 Introduction

1. (1)

   1This appendix sets out how a firm should handle complaints relating to the sale of a payment protection contract by the firm which express dissatisfaction about the sale, or matters related to the sale, including where there is a rejection of claims on the grounds of ineligibility or exclusion (but not matters unrelated to the sale, such as delays in claims handling).

2. (2)

   It relates to the sale of any payment protection contract whenever the sale took place and irrespective of whether it was on an advised or non-advised basis; conducted through any sales channel; in connection with any type of loan or credit product, or none; and for a regular premium or single premium payment. It applies whether the policy is currently in force, was cancelled during the policy term or ran its full term.

The aspects of complaint handling dealt with in this appendix are how the firm should:

1. (1)

   assess a complaint in order to establish whether the firm's conduct of the sale failed to comply with the rules, or was otherwise in breach of the duty of care or any other requirement of the general law (taking into account relevant materials published by the FCA, other relevant regulators, the Financial Ombudsman Service and former schemes). In this appendix this is referred to as a "breach or failing" by the firm;

2. (2)

   determine the way the complainant would have acted if a breach or failing by the firm had not occurred; and

3. (3)

   determine appropriate redress (if any) to offer to a complainant.

Where the firm determines that there was a breach or failing, the firm should consider whether the complainant would have bought the payment protection contract in the absence of that breach or failing. This appendix establishes presumptions for the firm to apply about how the complainant would have acted if there had instead been no breach or failing by the firm. The presumptions are:

1. (1)

   for some breaches or failings (see DISP App 3.6.2 E), the firm should presume that the complainant would not have bought the payment protection contract he bought; and

2. (2)

   for certain of those breaches or failings (see DISP App 3.7.7 E), where the complainant bought a single premium payment protection contract, the firm may presume that the complainant would have bought a regular premium payment protection contract instead of the payment protection contract he bought.

There may also be instances where a firm concludes after investigation that, notwithstanding breaches or failings by the firm, the complainant would nevertheless still have proceeded to buy the payment protection contract he bought.

In this appendix:

1. (1)

   "historic interest" means the interest the complainant paid to the firm because a single premium payment protection contract was added to a loan or credit product;

2. (2)

   "simple interest" means a non-compound rate of 8% per annum; and

3. (3)

   "claim" means a claim by a complainant seeking to rely upon the policy under the payment protection contract that is the subject of the complaint.