Banks braced for new round of PPI payouts after recent court ruling
Payment Protection Insurance (“PPI”) has been a hot topic for years. PPI were policies designed to ‘protect’ your ability to make repayments in circumstances where you couldn’t make them yourself. These include if you were made redundant or couldn’t work due to an accident, illness, disability or death. It has become clear that a lot of these policies were mis-sold to customers which has resulted in nearly £30bn being paid out to people in relation to the premiums that they had originally paid out for the products.
It has been reported on the BBC website that a Court ruling in Manchester may open the door for customers to also recover the amount that was paid in sales commission, plus interest, for the legitimately sold policy that they took out. In the case in question Christopher and Joanne Doran took Paragon Personal Finance to court on the basis that they weren’t told about any commission exchanges at the time of the sale. The couple approached a credit broker in 2004 for a loan of £30,000 and signed an agreement for the sum of £40,500, made up of a £30,000 loan and a PPI policy with a premium of £10,500. Paragon Personal Finance received commission of £7,985.46, or 76% of the PPI premium, from the insurer.
The judge in the case said that the Dorans would not have taken the policy had they known the level of commission and so ordered Paragon Personal Finance to pay the full PPI premium and accrued interest. This amount goes above the guidelines from the Financial Conduct Authority (FCA), which say if over 50% of your PPI’s cost went as commission to the lender, and that wasn’t explained to you, you are due back the extra above that. In this case that would mean they would only have been due back 26% of the PPI premium.
Unlike the mis-sold PPI claims, anyone who wants to make a claim to recover all of the commission they paid on their PPI policy will have to go through the courts. At MTB we have the skills and expertise to fully advise you of your rights and, thereafter, provide you with the representation you require in order to make a successful claim.
The deadline for reclaiming PPI is fast approaching. All claims must be lodged by August 2019. If you feel that you may be eligible to make such a claim, please contact our offices and we shall arrange a free consultation to discuss your options.