Plevin Claims – (PPI)
The Financial Conduct Authority (FCA) consulted in 2015, and again in 2016, on a package of measures including proposed new rules and guidance on handling Payment Protection Insurance (PPI) complaints in light of the Supreme Court’s decision in Plevin v Paragon Personal Finance Limited (Plevin). In the Plevin case, the Supreme Court ruled that a failure to disclose to a client a large commission payment on a single premium PPI policy made the relationship between a lender and the borrower unfair under section 140A of the Consumer Credit Act 1974.
Plevin refers to Mrs Susan Plevin. In 2014, she brought a PPI case to Paragon Personal Finance. She argued that she was mis-sold a PPI policy on a loan because of high levels of commission that was not disclosed to her at the time of purchase.
- Mrs Plevin had borrowed £43,000 from Paragon Personal Finance through a broker. She was told that commission had been paid on the deal, but crucially she was not told how much. It was only later she found that just over £1,600 had been spent on the policy and the rest had gone in commission.
- The claim went all the way to the Supreme Court which eventually ruled Mrs Plevin was owed compensation because the failure to disclose the size of the commission package meant her policy had been mis-sold.
It was immediately obvious that the judgement affected many thousands of consumers who had been sold their policies in the same way but had their claim for compensation previously rejected by the lender.
Her PPI policy was 71% commission. She argued that if she had known the commission was so high, she might not have bought the policy in the first instance. The case went to the Supreme Court, and it ruled in Mrs Plevin’s favour, resulting in a refund.
What Is the Plevin Ruling?
Mrs Plevin’s case set a precedent for future cases. After due consideration, the FCA ruled that if others want to make a PPI claim about high levels of commission, they can do so. Any amount of commission over 50% is classified as being mis-sold. The individual can receive a refund on the percentage amount over fifty.
This means that even those who knowingly bought PPI could make a case if they were unaware of high commission. At the time that many policies were mis-sold, it was common for banks and lenders to have 67% commission. Thousands of people have already made successful cases thanks to the Plevin ruling.
How Does Plevin Affect PPI Claims?
If you’ve already made a successful claim, you can’t make another claim due to the Plevin ruling. But, if you think you could have been in a similar position to Mrs Plevin, you must submit your claim to the bank before the PPI deadline of 29th August.
If your claim has been rejected, you can submit another claim and cite high levels of commission as the reason for your claim. If successful, you will receive a refund back for anything over the 50% threshold.
New Rules about Plevin PPI Claims
The FCA is currently reviewing its guidance on the Plevin rule. Currently, an individual can claim about the commission if it was not disclosed at the point of sale. However, the FCA is now discussing whether a lack of reminding customers about the policy and the commission could also be a cause for a refund.
In addition to this, last year a Plevin PPI case went to the Manchester County Court,
and a couple received a full refund of their 76% commission.(please Doran v Paragon below). Usually, individuals will receive the percentage over the 50% threshold. The FCA is not changing the rules based on this case. If individuals choose to seek a full refund, they will need to take the case to court.
Doran v Paragon
Christopher and Joanne Doran took Paragon Personal Finance to court. The broker charged excessive commission on the Dorans’ payment protection insurance (PPI). The Dorans were unaware that 76% of their PPI premium was paid to the broker.
The Financial Conduct Authority (FCA) rule states that customers can claim back money from their broker. This is if more than 50% of their PPI payments went through as commission. The information was usually also not disclosed upon taking the policy.
The judge ruled that the Dorans would not have bought the policy if the commission had been disclosed. As a result, Paragon was ordered to pay back the full £7,985.46.
A leading litigation expert said “This judgement is extremely important as the Defendant tried to persuade the Court that the unfairness related to matters that took place at the time of entering into the agreement.
“The average commission banks were paid was 67%. As a result, millions of people who were sold PPI could be entitled to this additional compensation.
“The court held that appropriate redress that should be awarded is the full amount of the PPI policy and the interest paid. APJ welcomes this decision.”
The ruling also shows that individuals can get access to justice through the Court.
He continues: “As a result, Doran v Paragon opens space for people who have previously been unable to secure compensation to do so. Even if a PPI policy was not mis-sold, customers could still reclaim due to excessively high commissions that were paid out.”
2. Clarity and transparency in marketing and communications with clients
The FCA are requiring firms that have sold PPI to write to previously rejected mis-selling complainants who are eligible to complain again in light of Plevin, in order to explain this to them. It would be deemed unfair and misleading for you to omit this information in marketing or communications with clients. When a client is deciding whether to instruct a Solicitor to represent them in making a Plevin related complaint, they should be able to make a fully informed choice based on the information you have provided. You should also ensure that you don’t mislead clients about the likely level of redress they may receive and explain clearly how this will be calculated. Misleading clients or omitting to provide information is a breach of the Conduct of Authorised Persons Rules (CAPR) and potentially other consumer protection regulations.
4. Eligible Plevin cases
Not all complaints will be considered or re-considered on Plevin grounds. Where redress has already been paid on the basis that the client would not have bought PPI but for the sales failings, then the lender does not have to consider or pay redress to the client if a further complaint is made about undisclosed commission. If the complaint was submitted after late 2015, the lender should have told you that it will consider the commission it earned as part of the complaint. You have an obligation to act responsibly and take all reasonable steps to investigate the existence and merits of (each element of) the claim and substantiate the basis of the claim.
5. Referring complaints to the Financial Ombudsman Service
If you are unhappy with the way the financial business has answered your complaint on Plevin grounds, then you’ll need to think carefully about whether you should refer this to the Financial Ombudsman Service. The Financial Conduct Authority’s rules state that if the consumer has already received full redress from the business they won’t be due anything further, so you’ll need to check this first.
Before referring complaints to the Financial Ombudsman Service, you should work with the financial business to understand how it reached its answer, so you can properly advise your client about their options.
If you decide to refer a complaint to the Financial Ombudsman Service, it will expect clear reasons why your client is unhappy with what the business has said and you should provide evidence where necessary to support this.
We deal with a wide range of Accident Claims including – Road Traffic Accident Claims, Accidents at Work, Accidents in Shops / Shopping Centres or the Street, Trip or Slip accidents, Claims involving Animals, Beauty / Cosmetic Treatments Claims, Children’s Claims and Faulty Products.
How we can help with your claim
Our Claims department is headed by Solicitors Michelle Niaz & Stephanie Lee.
Michelle and Stephanie both at our Clitheroe office, represent clients based in all areas of the country. Michelle qualified as a Solicitor in 2015 in all she has over 20 years experience handling all types of claims from PPI, Plevin Claims, Miscalculated Interest Claims, Housing Disrepair (HDR), Road Traffic Accidents , Work Accidents and Public Liability Claims, Cavity Wall Claims, Solar Panel Claims to list a few.
Michelle is also the Managing Partner and heads the team based at the Clitheroe Office acting for both individuals and corporate clients . She is part of a team of claims specialists who handle a wide range of claims from those of relatively modest value up to multi track litigation .
Michelle and her team look to provide the best client service and ensure there is access to justice for all . They seek to obtain the best possible result in all their cases and maintain a high level of client satisfaction .
Stephanie qualified as a Solicitor in January 2000 and is also Accredited by the Association of Personal Injury Lawyers (APIL) as a Senior Litigator with over 22 years experience. The Association of Personal Injury Lawyers (APIL) is a not for profit organisation representing the interests of injured people. Stephanie is the only Senior (APIL) Accredited Solicitor in Clitheroe.
As the claim progresses, we keep you up to date by telephone or email. Stephanie has been successfully representing clients for 22 years. We work on a no win no fee basis. This means no upfront payment is required from you to make a claim. We are happy to explain this in more detail.
We are a friendly firm of solicitors offering a very personal service.
Please contact Michell Niaz or Stephanie Lee on 01200 428 102 or use any of the contact detail found here.
About Lewis Mitchell Solicitors
At Lewis Mitchell Solicitors we assess the claim and identify whether the client has a legitimate and winnable case to present.
If so, then we will do everything we can to bring about a successful outcome – one that properly compensates the client for whatever financial losses that he or she has sustained.
We are happy to act on a No Win-No Fee basis for cases we take on.
Other Types of Claims Handled by the Firm
These are some of the accident cases we deal with:
- Accidents at Work
- SIPP Mis-selling Claims
- Road Traffic Accidents
- Trips, slips and Falls in Commercial or Public Spaces
- Whiplash Injury Claims
- Faulty Products
- Children’s Accidents
- Other Personal Injury Claims
- Solar Panel Claims Solicitors
- Serious Injury Claims
Personal Injury Claim Criteria
In order to be entitled to make a legitimate personal injury claim, the following criteria should apply:
- You suffered the injury or illness through no fault of your own, and:
The incident was caused by an individual or organisation that failed to take reasonable care for your safety, and:
- The incident took place within the last three years, and:
- The injury or illness caused you pain or distress, or:
- It caused you to entail a financial loss (e.g. through being unable to work) or:
- It caused you to entail exceptional expenses (e.g. the costs of medical care, adaptations or equipment required during your recovery) or:
- It caused your quality of life to suffer (e.g. it resulted in a disability of some kind)
- Injuries may be physical or psychological and may have temporary or permanent effects.
How Lewis Mitchell Can Help You
As responsible legal professionals, we will help you to present any legitimate personal injury claim and to achieve all the compensation to which you should be entitled.
We have an excellent track record in this field and we are extremely proficient at giving the courts a clear and accurate impression of the losses you have suffered in order that they can make a fair and appropriate award. When these awards reflect serious injury or accidents that will have a lasting effect on one’s lifestyle and independence, they can be very significant and can make a lasting difference to the quality of our clients’ lives. We therefore take our responsibilities very seriously and do our utmost to achieve the best possible outcome for you.