Many of us remember the adverts with Arnold Schwarzenegger that were consistently on our TV screens at the start of 2019, telling us that we had until August 29th to submit any Payment Protection Insurance (PPI) compensation claims. Whilst the ad might not have been your favourite thing to watch, it certainly served its purpose and by the deadline banks, building societies and other credit providers had paid out a shocking £36bn to those who had been mis-sold the insurance policy since the 1980s. It was a triumph for mis-sold consumers across the nation.
However, August 29th 2019 wasn’t the last time the courts or the banks heard from disgruntled individuals about PPI mis-selling. Many Lenders included high levels of commission as part of the total PPI premiums without the consumers knowledge. In 2009 the Competition and Markets Authority published an investigative report about PPI which highlighted that typical commission rates were between 40-80 per cent of the premiums. By keeping the commission they earned from the PPI a secret, the Lender may have created and unfair relationship which may result in receiving a refund of the premiums paid.
The introduction of a Supreme Court ruling known as ‘Plevin’, or commission only claim, in 2014 meant claims could be put forward by consumers whose policy provider earned a high level of commission from their PPI policy that they weren’t aware of. This has colloquially become known as a ‘Plevin PPI’ claim.
Where did Plevin come from?
In 2014, a claim was brought by Mrs Susan Plevin against Paragon Finance (Plevin v Paragon Personal Finance Ltd). Mrs Plevin took out a personal loan with Paragon Personal Finance Ltd through LLP Processing (UK) Ltd along with PPI which was added to the loan. A whopping 71.8 per cent of the premium was made up of commission which Mrs Plevin was not aware of, nor the identity of the recipients of the commission.
When the matter was considered by the Supreme Court in the leading Judgment, Lord Sumption held that the non-disclosure of commission was a source of unfairness by reason of ‘sufficiently extreme inequality of knowledge and understanding’. He stated that there is a tipping point where commission becomes so excessive that it renders the relationship between the borrower and lender unfair.
What does this mean for others who may have had the same issue?
Post-ruling of the Plevin case, the Financial Conduct Authority (FCA) ruled that any amount of commission from PPI policies of over 50 per cent was mis-selling, and that claimants can receive a refund for any amount of compensation over the 50 per cent threshold.
It has been reported that, at the time the insurance schemes were mis-sold, Lenders were paid a high level of commission, according to the Regulator the average commission was 67 per cent.
A Plevin PPI claim requires a claim which invariably requires the commencement of court proceedings against your Lender.
I claimed for PPI and was unsuccessful, can I claim for Plevin?
Yes, anyone who’s claim was rejected prior to the PPI claim deadline of August 29th 2019 can submit a compensation claim for Plevin. You can also submit a claim for Plevin if you won your PPI case, but no money was refunded to you.
I claimed for PPI and was successful, can I claim for Plevin?
Unfortunately not. In the eyes of the courts, if you have successfully claimed for PPI compensation, you have received recompense and cannot claim again.
How is a Plevin claim compensated?
The case of Plevin v Paragon ignited a new wave of claimants, all of whom felt, and continue to feel, lied to and let down by their Lender. As best summarised by Lord Sumption:
“Any reasonable person in her [Plevin’s] position who was told that more than two-thirds of the premium was going to intermediaries, would be bound to question whether the insurance represented value for money and whether or not it was a sensible transaction to enter into. The fact that she was left in ignorance made the relationship, in my opinion, unfair.”
If you believe you may be eligible for compensation under the Plevin ruling, our specialist Financial Litigation team can help guide and advise you through the process.
We will obtain disclosure of the account data, which includes large volumes of complex data that requires expert attention. We will analyse this data in order to accurately assess the value of the Customer’s losses (including where there has already been a mandatory redress payment) and identify the irregularities that will form the heads of claim.
If you would like to talk to us and/or begin a ‘no win, no fee’ claim, please contact us here: https://lysanderlaw.co.uk/contact/