More than 1.5 million consumers have complained about being mis-sold the controversial cover during the past six years, but banks and other providers have rejected the claims in 60 per cent of cases, and less than a quarter of people went on to complain to the Financial Ombudsman Service (FOS).
Industry rules state that consumers must refer their claim to the FOS within six months of having it rejected by their provider, or they lose the right to complain.
The rules mean that many people who were mis-sold policies may be prevented from getting compensation, even though the industry is expected to pay out between 7 billion and 9bn in redress after abandoning a legal battle on new rules about mis-selling.
A Financial Services Authority spokesman said: "If a firm rejects a complaint it must tell the complainant that they have six months to refer their complaint to the Financial Ombudsman Service. It is then the responsibility of the complainant to make that referral."
The FSA is understood to be considering whether to use new powers to force firms to review previous PPI complaints that have been rejected.
There may also be another route for people who have previously complained to get compensation, as firms must now proactively contact customers and alert them to the fact that they may be entitled to redress if they identify a pattern of mis-selling.
It is thought that people who receive one of these letters may be able to reissue their claim even if they have previously had it rejected and not taken it to the ombudsman, Natalie Ceeney.
Sarah Brooks, head of financial services at Consumer Focus, said: "Everyone should be given the chance to get compensation if they were mis-sold PPI, even if they had a previous complaint rejected by their bank.
"Banks have come this far - it would be a shame to see them using a loophole to avoid treating all victims of mis-selling equally and fairly."
The ombudsman has frequently complained that banks were not handling PPI complaints properly, often rejecting them without investigating.
It has found in favour of consumers in two-thirds of cases, although this rises to 100 per cent for some financial services firms.
PPI is currently the most complained about product to the FOS, which handled 104,597 disputes on the issue during the 2010-11 financial year, accounting for 51 per cent of the record 206,121 cases it looked at.
The insurance covers debt repayments if the holder is unable to work due to an accident or illness, or if they lose their job.
It looks set to become the biggest mis-selling scandal the UK has ever seen, with final PPI compensation likely to dwarf the 4.5bn paid to people who were wrongly sold personal pensions and the 2.7bn paid to victims of endowment mis-selling.