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Britons may be able to claim billions more in PPI compensation

Britons may be able to claim billions more in PPI compensation after key court ruling

  • A judge awarded Christopher and Joanne Doran the entire sales commission they paid plus interest
  • It ruled that the couple would have never bought the policy had they known how big the commission paid to Paragon Personal Finance

PPI mis-selling: UK banks could face up to £18bn in new claims

Britons who were not mis-sold payment protection insurance but did not know of the sales commissions paid to their broker could be able to claim billions more in compensation following a key court ruling.

A judge has ruled that a couple who had voluntarily bought PPI, but did not know how much they had paid in commission, were entitled to be compensated for the whole amount they had dished out unknowingly.

Until now, under the so-called Plevin rule, people who were not told about commission received by firms selling them PPI could claim back the amount of commission when above 50 per cent – but only the amount in excess of 50 per cent.

But Christopher and Joanne Doran were awarded the entire sales commission they paid, and not just the amount above 50 per cent of the premium, plus interest.

A judge ruled that the couple would have never bought the policy had they known that Paragon Personal Finance had received 76 per cent of the PPI premium in commission from the insurer.

The couple were paid a total of £17,345, which represents the full premium and interest and not just the 26 per cent in excess they would have been paid under the Plevin rule. 

Paragon Banking Group said: ‘We believe this decision is at odds with other cases heard recently and does not create a precedent. The Doran case is one of a handful of legacy cases for Paragon and we are considering our position regarding appeal.’

The new court ruling could see a new wave of claims worth up to £18billion, according to lawyers’ estimates. This would be on top of the £30billion in PPI already paid out by lenders since 2011.

The FCA, however, said it did not recognise the £18billion figure. A spokesperson said: ‘We have always said that different courts could take a different approach. However, it remains our view that our approach has been fair and appropriate.’ 

Around 1.2million complaints – out of a total of 13million – have been successful under the Plevin rule.

This rule was introduced in November 2014 when a Supreme Court judgment agreed that a company’s failure to tell its client that it was receiving a large commission for the sale was unfair.

The commission is the money paid to firms who sold the policies to consumers on behalf of the insurers. 

The final deadline for making a complaint about mis-sold PPI is the 29 August 2019.

 

 

 

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Read more at DailyMail.co.uk


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