If your broker charged excessive PPI commission, you could be entitled to claim compensation. This is a result of a ruling in Plevin vs Paragon.
As an incentive to sell PPI to customers, product providers offered large amounts of commission to lenders. As a result, PPI was sold to those who didn’t necessarily need the product. In many cases, customers were unaware that the product was optional. Consequently, they paid out large and unnecessary premiums alongside their loan so that the broker could secure their commission.
Additionally, the amount of PPI commission paid to lenders was often undisclosed. This left customers in the dark about unnecessary premiums on top of their original loan.
Plevin and PPI commission
The Plevin ruling allows you to make a complaint on the grounds of an unfair relationship. It follows a landmark case, Plevin v Paragon Personal Finance Ltd (Plevin), that saw Susan Plevin challenge this commission in the Supreme Court. Plevin’s PPI premium saw 71.7 percent taken as commission by Paragon, credit broker LLP Processing Ltd and provider of the PPI, Norwich Union.
The court ruled in Plevin’s favour. The lender was consequently forced to pay back the PPI premium with interest as compensation. As a result, the ruling opened up a fresh chance for those treated unfairly by lenders to make their claim.
Making a complaint on PPI commission
Following the Plevin ruling, the FCA stated that PPI commission of 50 percent or more is unfair. Under this guideline, PPI customers are being urged to check their loan statements.
If you no longer have these, you can contact your bank and they can give you details of the payments made.
If the PPI commission on your premium was more than 50 percent, you could certainly claim under the Plevin rule. Get in touch with our team today for advice on the steps you can take.