It’s almost a year since the FCA’s much publicised PPI deadline of August 29th which was intended to bring an end to PPI misselling claims. It is worth noting that by the end of December, 2019, £38.3bn had been returned to consumers (according to the FCA’s own figures https://www.fca.org.uk/data/monthly-ppi-refunds-and-compensation) but is this really the end of it?
Millions of people have benefited from making a PPI misselling claims with total PPI paid out of c.38bn with an average of 67% of commission, which was paid to the lender. PPI has led to some significant legal cases, originally Plevin v Paragon Personal Finance Limited but further supported by Doran v Paragon Personal Finance Limited and more recently in Potter v Canada Square Operations, which established that such high levels of commission, combined with the fact that this commission was not disclosed to the consumer, meant that the relationship between institution and consumer could no longer be categorised as fair.
So what does this mean for the average consumer? Well, on the one hand, if they did not make a claim for PPI there is still the ability to do so but they need to engage a law firm to bring their Plevin claim. In addition to this there are great swathes of consumers who had their original PPI claim rejected (by the lender or the Financial Ombudsman Service) on the basis that PPI had not been missold. People in this camp will also be able to bring a Plevin type claim due to the unfair relationship that arises as a result of the level of undisclosed commission regardless of the policy having been missold or not.
Bearing this in mind it does beg the question: what has been the impact of the August 29th 2019 FCA deadline? The reality is that the deadline has driven all those claims out of a regulatory claim framework and into litigation. As a result, whilst PPI complaints came to an end on August 29th the Plevin/unfair relationships/undisclosed commission cases have only just started and are likely to continue for a long time to come.
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