1Under section 29(3) of the Financial Guidance and Claims Act 2018, the fee cap applicable to regulated claims management activity in connection with a PPI claim is 20% of the amount recovered. The cap applies by reference to a sum comprising all amounts charged for such services in connection with the claim (whether or not charged under a single agreement), exclusive of VAT.
Section 31 of that Act (PPI claims: interim restriction on charges imposed by authorised persons after transfer of regulation to FCA) prohibits a firm from:
Any payment in excess of the claims management fee cap is recoverable by the customer. The FCA would expect the firm to reimburse the customer promptly, irrespective of whether the customer has asserted that the firm has breached the fee cap.
Any agreement which provides for the payment by a customer of charges which would breach or are capable of breaching the claims management fee cap are not enforceable to the extent that they provide for such a payment.
Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.