Undisclosed Commission and Plevin PPI Claims

Undisclosed (or secret commission)

What do we mean by undisclosed or secret commission?

In a recent court case, it was ruled that a failure by a lender to tell the customer about high commission it paid the advisor made the relationship between the lender, the advisor and the customer unfair.

Have you been advised to buy a financial product (loan or mortgage) that paid high commission you were unaware of?

It’s sadly true that many financial advisors, accountants and brokers have earned substantial commission from lenders and not told their customers about it. The courts have said this causes them a conflict of interest as they should always work in the best interests of their clients and the receipt of such commissions from a lender may result in them favouring a lender over a more suitable one.

You can get a refund for the secret loan commission

The bottom line is that non disclosed or secret commission paid by your mortgage or loan broker must be repaid as compensation to you and interest must also be added.

Plevin – You could still be owed £££

As well as potentially mis-selling billions of pounds of PPI policies, the banks also took a huge amount of commission for every policy sold. They often omitted to tell you – the customer – the commission was 67% on average.

Recent court cases mean that if a lender did not declare how much commission they would earn from selling a PPI policy, then an “Unfair Relationship” was created under the Consumer Credit Act, meaning the lender would be liable to repay all ‘undisclosed commission’ and all premiums, even if the PPI policy was not mis-sold.

If you think you have a valid claim contact us today..

The detail:

What is Plevin?

This rule comes from the Plevin v Paragon Finance Limited 2014 case.  The Supreme Court found that Mrs Plevin was charged excessive undisclosed commission by the broker who sold her the PPI.  It was found that 71.8% of the premium she paid for her policy was commission! The non-disclosure of the commission payment, and the percentage of the PPI premium that was paid as commission meant there was an ‘unfair relationship’ under the Consumer Credit Act 1974.

The Regulator then ruled that any payments for commission that were over 50% of the cost of the policy created an unfair relationship and so Lenders were instructed to pay back anything over the 50% tipping point plus interest.

This ruling by the Regulator was challenged in 2018 when Manchester County Court ruled that the full amount of the compensation would be paid back rather than the amount over the 50% tipping point.  They concluded that the customers would not have taken out the policy if they had been aware of the level of commission on it.

Does the Plevin Ruling apply to my case?

The ruling allows anyone who was charged excessive commission which was not disclosed to them to bring a claim for repayment of all premiums and interest.  This is a different claim to the previous PPI mis-selling claims.  The policy may not have actually been mis-sold but if secret commission was paid during the sale you might still be able to claim.

The criteria for knowing whether you have a Plevin claim are as follows:

  • Your PPI policy was sold before April 2007 and was still open after 6 April 2008
  • Your PPI policy was sold after April 2007 (whether or not it was still open after 6 April 2008)
  • You have not previously complained about mis-sold PPI
  • You have had a PPI claim rejected
  • You received a refund for the ‘Plevin’ part of your PPI (commonly known as a tipping point offer)

If you think you have a valid claim contact us today.  We are working in collaboration with a team of solicitors to pursue Plevin PPI claims on your behalf.

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