Following the deadline for making a PPI (Payment Protection Insurance) claim, there has been a lot of talk about the Plevin Claim. But how is it different to a mis-sold PPI claim? And are you eligible? Hazra Akuji, Solicitor and Head of Litigation here at Legal UK Services, explores some of the key facts and when it comes to these claims.
What is PPI?
There is no doubt that you will have heard of, or quite possibly been contacted about making a claim against a lender for a mis-sold Payment Protection Insurance (PPI) policy.
PPI was designed to assist consumers in certain situations where they were unable to make repayments on finance they had taken out. But unfortunately, PPI started getting sold to individuals that did not meet the criteria and, in some circumstances, without their knowledge.
This resulted in a raft of claims with individuals rightly seeking compensation. The deadline for making a claim of this nature, which was widely advertised, was August 2019.
What is the Plevin Claim?
The Plevin Claim was named after Susan Plevin, who won a landmark Supreme Court case in 2014 against Paragon Personal Finance for an unfair contractual relationship.
Mrs Plevin was sold a PPI policy to cover her secured loan but soon became aware that 71.8% of the premium she had paid was actually a commission payment to her lender. Mrs Plevin claimed that had she been informed of this prior to the agreement, she would have certainly re-considered her decision.
Claiming this was unfair, she decided to formally challenge the lender. The Supreme Court eventually agreed that the relationship was unfair on the basis of:
- Non-disclosure of the commission payment
- The percentage of the PPI premium that was paid as commission.
For this reason, Mrs Plevin went on to successfully recover a full settlement of her PPI premium and interest.
Following this key ruling, the Financial Conduct Authority (FCA), who regulate banks and financial institutes, released guidance to lenders informing them that where a credit agreement was subject to undisclosed commissions and the commission level exceeded 50%, they must provide the customer a refund for the difference.
In the case of Mrs Plevin, that represented 21.8% (the difference between 50% and the 71.8% commission the lender received) of the total PPI premium.
However, the FCA does not have the power to legally enforce this guidance and nor does the lender have grounds to defend it. Therefore, it’s the job of the claimant and their solicitor, to actively pursue compensation against this mis-selling.
How is this different from a PPI claim?
A standard PPI claim focuses on whether that particular policy was suitable to the buyer and whether the individual met the criteria. Plevin PPI claims are different as they focus on the unfair relationship between lender and buyer, due to them failing to disclose commissions they received when selling the policy.
Can I make a claim? And if so, how?
At this moment in time, the only way to make a Plevin PPI claim is through a litigated claims process, which will involve a firm of solicitors making a court claim against the lender on your behalf.
Although the PPI deadline has now well and truly passed, Legal UK Services are still successfully assisting many clients through the courts to address similar claims as Mrs Plevin.
To be eligible to bring a ‘Plevin’ claim, the following criteria applies: –
- Your PPI policy was sold before 6 April 2007 and open after 6 April 2008, or sold after 6 April 2007 (whether or not it was still open after 6 April 2008)
- You have not previously complained about mis-sold PPI
- You have had a PPI claim rejected
- You had a refund for the ‘Plevin only’ part of your PPI (a ‘tipping point offer’)
If you believe that you are eligible to make a claim subject to the above, then Legal UK Services are here to help. Contact us on 01615 180 980 to speak to one of our advisors, or e-mail [email protected].