A Plevin claim refers to a type of financial compensation claim in the UK that arose after a landmark court case in 2014. Here’s a detailed breakdown:

What is a Plevin Claim?

Susan Plevin named the Plevin claim after herself when she successfully argued that her lender had treated her unfairly by not disclosing the large commission (71.8%) taken from her Payment Protection Insurance (PPI) premium. The Supreme Court ruled in her favor, stating that the lender’s failure to disclose the high level of commission rendered the relationship between the lender and the borrower unfair under the Consumer Credit Act 1974.

Why is it Useful?

Plevin claims offer consumers a means to seek redress for mis-sold PPI policies. Many consumers did not know about the high commissions taken from their PPI payments, which often rendered the insurance poor value for money. The Plevin ruling allows consumers to reclaim the excess commission deemed unfair.

How Did it Come About?

The wider PPI mis-selling scandal, where sellers mis-sold millions of PPI policies to consumers who did not need, could not use, or did not know they were buying them, led to the Plevin case. The Plevin ruling added a focus on the fairness of the relationship between lender and borrower, especially regarding undisclosed commissions.

Eligibility for a Plevin Claim:

You may be eligible for a Plevin claim if:

  • You have a PPI policy.
  • The lender or broker received a commission over 50% of the PPI premium, which was not disclosed to you.
  • You have not already made a successful PPI claim on the policy.

Making a Plevin Claim:

To make a Plevin claim, you typically need to:

  • Gather evidence of your PPI policy and any related documentation.
  • Determine whether the lender received high levels of commission and if they did not disclose it.
  • Make a complaint or claim to the lender, citing the Plevin case as a precedent.
  • If the lender rejects your claim or you are unsatisfied with the response, take your complaint to the Financial Ombudsman Service (FOS).

Using a Claims Management Service:

Many individuals choose to use a claims management service, such as MyClaimsCentre, for assistance. These services can:

  • Review your case to determine if you likely have a valid claim.
  • Help you gather necessary documentation and evidence.
  • Manage communications and negotiations with the lender on your behalf.
  • Escalate the case to the FOS if necessary.

Claims management services often operate on a no-win-no-fee basis, taking a percentage of any successful claim as payment for their services. It’s important to check the terms and conditions of any claims management service before proceeding to ensure you understand any fees or charges involved.

Discussions:

Can I still make a Plevin claim if I didn’t get a PPI refund?

Even if a lender rejected your initial PPI claim—perhaps because they did not consider the policy mis-sold to you—you may still be eligible for a Plevin claim. The Plevin ruling specifically concerns the commission that the lender received for selling you the PPI. If the commission was above 50% and was not disclosed to you, you could be entitled to the difference back, plus interest. This is because the undisclosed high commission is considered to create an unfair relationship between you and the lender, as per Section 140A of the Consumer Credit Act 1974.

What is the average Plevin compensation payout?

The Financial Conduct Authority (FCA) has not published specific average figures for Plevin payouts, as they can vary significantly based on individual circumstances. However, the FCA generally calculates the payout as the difference between the actual commission paid and a ‘fair’ benchmark set at 50%. For example, if you paid a 70% commission, you could reclaim 20% of the PPI premiums you paid, plus interest. The amounts can range from a nominal sum to several thousand pounds, depending on the size of the PPI premiums paid.

I was rejected for PPI, can I still get Plevin compensation?

Yes, you can. The criteria for Plevin compensation differ from those for a standard PPI claim. A PPI claim typically focuses on whether the policy was suitable for the customer and whether the seller disclosed all relevant information at the point of sale. In contrast, a Plevin claim solely concerns the amount of commission paid out of your PPI premiums and whether the seller disclosed this. Therefore, even if you were not mis-sold the PPI policy under the usual definitions, you could still be eligible for a refund of the undisclosed commission.

What constitutes an unfair relationship under Plevin?

The Supreme Court’s decision in Plevin v Paragon Personal Finance Ltd established that a lender’s failure to disclose to a customer a large commission payment on a PPI policy could make the lender-borrower relationship ‘unfair.’ The FCA has since stated that commissions over 50% are unfair if not disclosed. The ‘unfairness’ arises because the lender did not inform the customer of the significant financial benefit the lender received from the sale of the PPI, which might have influenced the customer’s decision to take out the policy.

How long does a Plevin claim take?

The claim’s complexity, the lender’s responsiveness, and the involvement of a claims management company can all vary the time frame for a Plevin claim. Typically, once you submit a claim, a lender has eight weeks to respond. If the claim is straightforward and the lender acknowledges the undisclosed commission, they could resolve it within a few months. However, if the lender disputes the claim or if it requires the Financial Ombudsman Service’s involvement, the process could extend to a year or more.

Who can I claim Plevin against?

You can make Plevin claims against any financial institution that sold you the PPI policy and earned a commission from it. This includes banks, building societies, credit card companies, and any other lenders. If the original lender is no longer in business, you may still be able to make a claim through the Financial Services Compensation Scheme (FSCS), depending on the circumstances.

How was PPI mis-sold?

Customers sometimes did not know that PPI was optional or believed that their loan or credit application would be more likely to be approved if they took out PPI. In other cases, the seller added the policy without the customer’s knowledge, or customers bought policies that they were ineligible to claim on due to pre-existing medical conditions or employment status. The mis-selling was widespread and affected millions of consumers.

What is a Plevin claim?

You can make a Plevin claim for financial compensation if a lender sold you a PPI policy without disclosing the high level of commission they received from your premiums. The claim is named after Susan Plevin, who successfully argued that her lender’s failure to disclose the commission made her relationship with the lender unfair. The landmark ruling now allows others in similar situations to claim back the undisclosed commission above the 50% threshold.

Plevin Claim - My Claims Centre