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Plevin – What is it and what does it mean for PPI claims?

4th August 2017 - posted by Chris McCabe

A landmark legal battle – known as Plevin – could have a significant impact on the way PPI claims are handled in the future.

What is Plevin?

Plevin is a legal case that considers whether the levels of commission paid on PPI premiums are proportionate and fair. It also looks at whether consumers were misled by brokers who failed to disclose high commission levels during the sale of PPI.

Who is Plevin?

Susan Plevin, a retired college lecturer, took legal action against Paragon Personal Finance after she had PPI added to a loan. During her claim for mis-sold PPI, she discovered that 71.8 per cent of her PPI premium was taken as commission by Paragon, credit broker LLP Processing Ltd and provider of the PPI, Norwich Union.

Plevin argued that failure to disclose these commission levels amounted to an unfair relationship and should therefore result in the return of the full premium plus interest.

In 2014, the case went to the Supreme Court where judge Lord Sumption agreed with Plevin. The judge ruled that if a PPI seller failed to disclose to a customer that it had received a large commission from the product provider, the sale was unfair under the 1974 Consumer Credit Act.

Implications for your PPI claim

Industry watchdog, the Financial Conduct Authority (FCA), stated that more than 50 per cent commission is unfair. This is giving consumers fresh grounds for complaint.

In short, if a PPI policy was otherwise legally sound, the customer could still pursue a claim if the seller received a large, undisclosed commission.

In response, the regulator has also issued new guidelines. Now all firms have to proactively contact previously unsuccessful complainants to inform them that they may now be eligible to complain under the Plevin rules.

Brief timeline

March 2017 – Regulator tells banks to start preparing for Plevin complaint rules. You can put in a Plevin complaint now, and our experts are waiting to help you

29th August 2017 – From this point, banks must consider a straightforward Plevin complaint case from consumers. The FCA will also start publicising the August 2019 deadline with advertising campaigns.

Aug-Nov 2017 – Banks must issue letters to the 1.2 million people previously rejected for a PPI mis-selling complaint. This letter must explain about Plevin and the processes of a claim.

29th November 2017 – Above groups have received all communications

29th August 2019 – Final deadline for PPI claims

What next?

If you’ve previously had a PPI claim rejected, this ruling means there is fresh opportunity to pursue a legal case. It all depends on the size of the broker and seller’s commission pot.

Our specialist team can guide you through the process if you have a similar case. We can also help if you think you’ve been mis-sold PPI in any way.

Get in touch today on 0800 023 4953.

 

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