FAQ

Plevin PPI – FAQ

In 2006, Mrs Plevin was sold a PPI policy to cover her secured loan from Paragon Personal Finance Ltd. She took a claim to the Supreme Court in November 2014, alleging that the contract and her relationship with Paragon was unfair due to:

  • Non-disclosure of the commission
  • The percentage of the PPI premium that was commission

The Supreme Court ruled that failure by the lender to disclose to Mrs Plevin the large commissions payable out of her PPI premiums created an unfair relationship between her and the lender and redress was awarded to Mrs Plevin.

Lenders were usually paid a commission by the insurance provider, following the sale of PPI. The commission was taken out of the PPI premiums paid by consumers. So whilst consumers may have thought the premiums were for their cover, some of it was actually commission paid to the lenders for the sale of the PPI policy.

Often, the lender was paid a high level of commission, typically more than half of what you have paid for your PPI policy, according to the Regulator, the average commission banks were paid for PPI policies was 67%.

Source:  https://www.fca.org.uk/news/statements/fca-statement-payment-protection-insurance-ppi

If your PPI claim was initially defended and you were not awarded compensation, you may still be eligible to make a Plevin PPI claim.

Whilst a Plevin PPI claim is made in respect of the sale of a PPI policy, the basis of the claim and claims process are different to a mis-sold PPI claim.

Even if your PPI policy was not mis-sold, your Plevin PPI claim could be successful.

Historically, when lenders sold PPI they failed to disclose the commission they received, which was taken out of the PPI premiums paid by consumers. So whilst consumers may have thought the premiums were for their cover, some of it was actually commission paid to the lenders for the sale of the PPI policies.

A lender’s failure to disclose commission may have created an unfair relationship with the consumer. Following a court ruling, commonly known as the Plevin ruling, if this applies to you, this money can be claimed back.

As a Plevin PPI claim is made in respect of the sale of a PPI policy, it is affected by the PPI deadline.

The Financial Conduct Authority set a deadline of 29 August 2019 for PPI complaints. This means that generally, if you did not make a complaint to your lender on or before 29 August 2019, you can no longer raise a claim about the sale of your PPI policy by complaining directly to your lender or the Financial Ombudsman Service for free*.

Currently, the only way to make a Plevin PPI claim is through a litigated claims process, which may involve the commencement of legal proceedings against your lender.

*There are some exceptions to this, more information about this can be found on the Financial Ombudsman Service website.

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