185,000 previously rejected complaints against mis-sold payment protection insurance (PPI) are to be re-opened under new guidance from the City Watchdog.
The FSA will ask sellers of PPI to write to all holders of policies bought since 2007 in order to give them a chance to complain and potentially have their money refunded.
The reason behind this is to try and alleviate some of the pressure the Financial Ombudsman Service has faced recently with the unprecedented level of complaints they have received from the public after loan firms have rejected their complaints.
Firms representing more than 40% of face-to-face sales in the Single Premium Unsecured Personal Loan PPI market have agreed to review these sales and redress those consumers identified as mis-sold.
Single premium PPI has been the most notorious sort of PPI and the sale of it was banned earlier this year.
The FSA has currently taken action against 22 firms over poor PPI sales practices with Alliance & Leicester receiving the largest fine of £7m in October 2008 for serious failings in its telephone PPI sales.