Payment Protection Insurance (PPI) was often sold as accompanying insurance for many credit agreements, such as loans, mortgages and credit cards. The initial period to submit a PPI claim came to an end on the 29th of August 2019; however, some solicitors are unaware of the Plevin Ruling and how it could affect their clients.
In 2014, the Plevin vs Paragon Personal Finance Limited case heard in the Supreme Court, set a precedent for a new type of PPI claim.
Plevin argued that she was unknowingly charged an excessive commission of 71% when she purchased PPI. She stated that, had she known about the excessive commission, she would have never agreed to the policy. She was successful, and the courts ultimately determined that she had been charged an excessive, undisclosed commission by the broker who sold the PPI. The courts deemed it an unfair relationship under section 140A of the Consumer Credit Act 1974.
Throughout the PPI saga, banks charged an average commission of 67%, indicating that millions of people may now qualify for an additional PPI claim under the Plevin Ruling.
For your client to qualify under the Plevin Ruling, they must have been initially unaware that they were being charged 50% or more in commission, and their PPI and the connected loan had to be active around or after April 2008. Regardless of the outcome of their original claim, they may now qualify for a claim under the Plevin Ruling. Even if a previous PPI claim was successful, your client might be eligible for additional compensation.
If your client’s claim under the Plevin Ruling is successful, they are due to receive any commission paid above 50%, plus any interest that would have accrued. The Financial Times reported that banks could soon be forced to pay an additional £18bn in Plevin PPI claims alone.
The Plevin Ruling allows your firm to re-explore the PPI avenue for both new and existing clients. Your firm’s success in dealing with this development will depend on your ability to engage with previous clients as well as onboarding new clients simultaneously. We strongly advise that you approach an experienced legal management company, such as Atechy Legal, to handle re-engaging your clients, client retention, and lead generation to help your firm benefit from the Plevin Ruling.