FCA Debating if Even More People Can Claim PPI

Posted on July 6, 2018 by Canary Claims crowd of people in a line

Despite there being just 13 months until the PPI deadline, there is potential for even more money to be paid by the bank for PPI claims.

Two pieces of news regarding PPI claims were revealed this week. The first saw one bank pay a couple nearly £18,000 in a court case PPI claim. The second was the announcement from the Financial Conduct Authority (FCA) about reviewing the Plevin guidelines for banks and lenders.

At Canary Claims, we explain these two events and what it will mean for you as a consumer when making your PPI claim before the impending August 2019 deadline.

Landmark Court Case Sees Couple Claim PPI on Their Full Commission

Currently, if an individual makes a PPI claim based on the commission on the sale — also referred to as Plevin — they will receive a refund, if over 50% of the PPI policy sale was a commission. This can only be done if they had no knowledge of how much commission the bank or lender took from the sale. At the time when PPI was mis-sold, 67% was the average commission amount.

When making a PPI claim, if the consumer is successful, they will receive a refund for the difference on any commission over 50%. For example, if the commission was 67%, they’ll receive a 17% refund, plus interest. Over one million successful PPI payouts have come about under the Plevin rule.

However, news emerged this week of Christopher and Joanne Doran. Their Plevin PPI claim went to court and the judge ruled that they should receive all of the commission, plus interest. For the couple, this was 76%, creating a total payout of nearly £18,000. This case strays from the FCA guidelines that state consumers should only receive the difference over 50%.

The lender, Paragon Personal Finance (PPF), is the same lender that Mrs Plevin (of the Plevin rule) made her court case against. PPF is deciding whether to appeal the case.

What Does This Mean for Consumers Making Plevin PPI Claims?

The outcome of this case means that more people could claim their full commission amount as well. However, these claims may need to be taken to court, rather than settled by the bank or lender.

PPF may appeal the case and have their appeal upheld, meaning Mr and Mrs Doran won’t keep the full amount. Others who have not yet claimed may be tempted to do the same, despite the process being much lengthier and involving legal action. If more consumers decide to do this, it could result in an additional £18 billion shelled out from the banks.

FCA to Review Plevin Guidelines

On 4th July, the FCA announced that it’s reviewing its guidelines on the Plevin rule and how banks should respond to these claims.

The FCA is issuing a consultation paper, stating: “This is new guidance about the handling of certain regular premium payment protection insurance (PPI) complaints.

In March 2017, the court set rules regarding PPI claims and Plevin. The rules stated that if a bank or lender failed to disclose the commission amount when a PPI policy was sold, a claim can be made.

However, since then, uncertainty has emerged, so much so that the FCA needs another consultation. The paper will discuss whether not reminding customers about the commission while they had the policy is also a form of mis-selling. Depending on the outcome, this could lead to even more payouts.

This means that even if somebody bought the policy and was aware of the commission, if they were not reminded about it, they may be entitled to make a claim.

The results of the consultation close early September, so new guidance will not be offered to banks and lenders until this date. In the meantime, consumers are encouraged to start their claims now to avoid missing the PPI deadline.

Canary Claims is the best PPI claims company to handle your PPI claim. We have a no win, no fee PPI policy [Cancellation charges may apply only if the claim is cancelled after the 14 days cooling off period. The fee would be based on the work done at the time of cancelling at a rate of £120 per hour and up to a maximum total of £180] and charge just 15% + VAT (18%) on successful claims. We can start your claim today online or by phone, on 0800 634 8668.