Extra bill to pay for PPI complaint hike

Money pounds cash Pensions Insight

Brokers are set to pay even more in Financial Services Compensation Scheme (FSCS) fees next month after a mooted £21m interim levy became almost certain.

Firms will have one month to pay the extra bill, Insurance Times understands. The additional amount will be used to pay for an increase in payment protection insurance (PPI) mis-selling complaints handled by the FSCS.

The new levy will be about 55% of the FSCS element of brokers’ 2012-13 regulatory bill.

The extra charge was hinted at last year, and will take the total FSCS cost to insurance intermediaries this year to £57m.

Biba head of compliance and training Steve White said: “Following discussions we have had with the FSCS, we understand that there is a 99% certainty that this interim levy is coming.

“This will once again focus peoples’ minds on just how unfair the funding model is of the compensation scheme, and adds weight to our demand for change.”

An FSCS spokesman would not comment on the new levy.