THOUSANDS of people could be blocked from making a claim against their bank or insurance company under new Government plans.
Approximately 3,000 people a year receive compensation for company failings that happened a decade or more ago – with the average payout worth £200 each.
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But they risk not being able to do so under new plans buried within the Financial Services and Markets Bill, which is currently passing through Parliament.
Under the current rules you can make a complaint within three years from the point you become aware there was a problem.
The change means that someone who was missold a pension or investment in 2014 but didn’t realise until this year would be out of time to make a complaint.
The measures are predicted to save businesses more than £125million a year.
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Consumer rights expert Martyn James slammed the measures as “outrageous” and warned the change would mean a lot of Payment Protection Insurance (PPI) cases would have been rejected.
The PPI scandal saw thousands of people aggressively sold useless and overpriced insurance alongside loans, credit cards and mortgages.
As a result, banks paid out more than £38million in compensation to those affected before the claims deadline in August 2019.
Meanwhile, James Daley, founder of campaign group Fairer Finance, said: “Putting a ten year time bar on Ombudsman complaints represents a material reduction in consumer protections.
“Financial services products are almost all long-term products – and any harm suffered by consumers may not become apparent for years.”
A HM Treasury spokesperson said: “Under these plans, the FCA can make exceptions where issues may come to light after many years, such as pensions.
“In general the ten year limit reflects the evidence that older cases are less likely to succeed or are withdrawn, mostly due to limited records and evidence being available over time.”
