20
Mar 2020

Commission payments and PPI

Commission payments and PPI

Following the deadline for making a Payment Protection Insurance (PPI) Claim on 29 August 2019, Lenders are no longer accepting new Claims for PPI. However, many in the industry are now talking about commission payments, the Plevin ruling and how you may be eligible to make a Claim. You can read more about our Plevin PPI process here.

You may still be wondering how commission operates, why this can be unfair and if it was attached to your PPI policy.

Commission payments
The Financial Conduct Authority (FCA), the financial services Regulator, defines a commission payment as:

“any form of commission or remuneration, including a benefit of any kind, offered or given in connection with… the sale of a packaged product, that is offered or given by the product provider.”i

PPI was often sold or arranged by a broker – and the PPI company usually paid a commission to the broker for doing so.

The FCA suggest that the way staff are paid and managed can often influence how they behave with customers ii. The PPI mis-selling scandal certainly showed that some businesses were not acting fairly, or in the best interests of their customers.

The problem with commission payments is that, often, the customer was not made aware that a commission would be paid. To be able to make an informed decision about taking out a PPI policy, customers needed to know if the business selling them the policy would benefit as a result.

Did I pay a commission?
If you were sold a PPI policy, you may have paid a commission payment to the company who arranged this for you. Commission payments are typically shown on your account statements, or an account summary. We help our Clients locate commission payments in relation to their PPI policy(ies) by liaising directly with their Lender.

What is a high commission payment?
In the ruling of Plevin v Paragon, it was held that there was an unfair relationship due to the fact that Mrs Plevin was not informed that 71.8% of her PPI premiums were paid to the broker for arranging the sale of the PPI. You can read more on this case here.

The key fact was that Mrs Plevin was not made aware of the commission payments in this case. Since the Plevin ruling in 2014, there have been ongoing legal developments regarding the level of commission that would make a relationship unfair.

Can The Claims Guys Legal help?
When representing our Clients, we conduct a review of information relevant to their PPI credit agreement to establish whether there is an unfair relationship due to non-disclosed commission.

We will use our expertise and experience of Plevin PPI Claims to investigate, negotiate and settle your Claim. Throughout your Claim, we will keep you informed and provide clear, jargon-free advice on all of your options.

If you want to make a Claim, you are not sure if you are eligible, or you just want to find out more, please contact us.

0161 260 0810 ¦ plevin@theclaimsguyslegal.com

Sources

  1. https://www.handbook.fca.org.uk/handbook/glossary/?filter-title=commission
  2. https://www.fca.org.uk/publication/finalised-guidance/fg18-02.pdf, pg. 2