Payment Protection Insurance (PPI) received a lot of bad press in the last decade because of the mis-selling scandal. The product itself isn't bad, it was how it was sold that tarnished it. If PPI was sold correctly, borrowers were protected if they couldn't make their repayments due to illness, injury or unemployment.
It is known that PPI was widely mis-sold to many people alongside loans, credit cards and mortgages etc. Customers were mostly unaware that they had PPI, or if they knew they had it, checks had not been done by the seller to ensure the customer met the eligibility criteria.
PPI complaints can now be made to reclaim high levels of commission after a landmark court ruling in the case of Plevin in 2014. The ruling was based on how much of the PPI premium went to the lender as commission. In this case it was over 50% which created an 'unfair relationship' and the customer was unaware of it.
Known as the Plevin rule, the FCA have issued guidelines as to how such complaints should be dealt with.
In addition to the Plevin rule, another way of claiming mis-sold PPI is on behalf of a deceased relative (or close friend). There will be instances where relatives who have passed away would have taken out PPI alongside loans, credit cards and mortgages.
If a person who is now deceased had PPI policies in their lifetime, the person dealing with the estate has the right to make a claim on the policy or to reclaim PPI if the policy was mis-sold.
The Plevin rule came into effect on 29 August 2017 and is the result of a case brought by Susan Plevin and decided in the Supreme Court. The purpose of the rule is to ensure that insurance companies are not charging customers high levels of commission when they bought PPI.