Plevin & PPI Explained
Following the PPI deadline in August 2019 for making a Payment Protection Insurance (PPI) Claim directly with a business, many people have been talking about ‘Plevin PPI' or PPI 2 and how it could affect them.
Below we explain what a Plevin PPI claim is, how it differs from a Mis-sold PPI Claim and what the eligibility criteria is to make a claim under the Plevin ruling.
What is Plevin?
Plevin refers to a Supreme Court case from 2014. Mrs Plevin was sold a PPI policy to cover her secured Loan from Paragon Personal Finance Ltd. Mrs Plevin became aware that 71.8% of the premiums she had paid under her PPI policy were actually a commission payment to her Lender and she alleged that this was unfair. The Supreme Court agreed with Mrs Plevin, and ruled that the relationship was unfair due to the following:
- Not disclosing the commission payment; and
- The percentage of premium that was paid as commission.
You can read the full Plevin v Paragon judgement here.
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% was mis-selling, and that claimants can receive a refund for any amount of compensation over the 50% 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%.
A Plevin PPI claim invariably requires the commencement of court proceedings against your Lender.
What's the difference between Mis-sold PPI & Plevin claim?
The basis on which each of the claims is made are quite different. A mis-sold PPI claim looks into whether the PPI policy was suitable and circumstances under which it was sold, whereas a Plevin claim examines whether the Lender failed to disclose the high-level of commission they earned from the PPI premiums, rendering the relationship unfair.
Can I make a Plevin Claim after the PPI Deadline?
Plevin PPI Claims are not subject to the 2019 PPI deadline, so the answer is yes! Although the PPI deadline has now passed Plevin PPI claims are based on a completely different area of law, namely the Consumer Credit Act 1974.
Am I eligible to make a Plevin PPI Claim with Lloyds Bank?
You may be eligible to make a Plevin PPI Claim if:
- You have not previously complained about Mis-sold PPI with Lloyds Bank;
- Your PPI policy must have been 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 2007);
- You had your PPI Claim rejected by Lloyds Bank ;or
- Lloyds Bank only refunded for the ‘Plevin only’ part of your PPI also known as a ‘tipping point offer’.
Plevin Claim FAQs
What is PPI?
Many borrowers were sold
payment protection insurance (PPI) alongside finance products such as catalogue accounts, credit cards, loans, mortgages and store cards. The purpose of PPI was to cover the repayments if the borrower found they could not, due to being out of work for the following reasons:
- Accident
- Illness
- Disability
- Redundancy
- Death
Information from the Financial Conduct Authority (FCA) revealed that high street banks and lenders sold UK consumers approximately
64 million PPI policies. The majority of PPI policies were sold from 1990 to 2010, however, some sales go back as far back as the 1970s.
I previously 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 Mis-sold PPI and was successful, can I claim for Plevin?
No, unfortunately not. if you have successfully claimed for PPI compensation, you have received recompense and in the eyes of the courts cannot claim again.
How is a Plevin claim compensated?
The Plevin v Paragon case ignited a new wave of claimants, all of whom felt, and continue to feel, lied to and let down by their Lender. This was 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.
Our Financial Litigation partners will obtain disclosure of the account data, which includes large volumes of complex data that requires expert attention. The data will then be analysed in order to accurately assess the value of the Customer’s losses and identify the irregularities that will form the heads of claim.
Which PPI product names to look for in your paperwork
PPI policies were usually sold with other products like a loan, credit card, store card, mortgage, overdraft or with a car finance agreement.
If PPI has been included on a finance product you’ve had, the documents may state PPI clearly, others not so. There are many alternative names used to describe PPI and similar products. Look for the following terms on your paperwork:
- account cover
- credit insurance
- loan protection
- accident, sickness and unemployment (ASU) insurance
- credit protection
- payment cover
- loan care
- loan insurance
- loan repayment insurance
- income protection plan
Who were the biggest lenders that mis-sold PPI?
Around 64 million PPI policies were sold by banks and other financial firms between 1990 and 2010 and was the largest financial mis-selling scandal of all time. With £36 billion already paid in compensation for mis-sold PPI, this now set to substantially rise further with the 'Plevin' hidden commission claims.
Some of the main lenders in the Plevin PPI scandal are:
- Abbey National
- Alliance & Leicester
- Bank of Scotland
- Barclaycard
- Barclays
- Capital One
- HSBC
- Black Horse
- Lloyds
- Halifax
- Co-operative Bank
- Santander
- EGG
- TSB
- MBNA
- M&S Bank
- NRAM
- Natwest
- Mint
- Royal Bank of Scotland (RBS)
If you took out a loan, credit card, mortgage, or any other type of credit with any of these lenders its quite possible that you are eligible for a high commission refund claim under the new Plevin ruling.
