Car Finance Plevin PPI Claim
IT'S NOT THE END OF PPI
Potter v Canada Square - New Ruling April 2021
What is Plevin PPI?
Plevin refers to a Supreme Court case from November 2014 where Mrs Susan Plevin brought a case against Paragon Personal Finance Ltd regarding her PPI policy. The claim centred around the commission charges on a PPI policy that Mrs Susan Plevin was sold to cover a secured loan from Paragon.
Mrs Plevin later discovered that in the small print of the terms and conditions of the PPI policy, a whopping 71.8% of her premium was the amount of commission she was charged by the lender. She alleged that this was unfair and unclear and took Paragon to court and the case went up to the Supreme Court.
The Supreme Court agreed with Mrs Plevin and her lawyers, the Justices determined that the sale of the PPI policy was unfair because of the following reasons:
- The commission payment was not disclosed;
- The high percentage of the PPI premium that was paid as commission.
This decision set a precedent for a new category of PPI claims, and opened the floodgates against banks and other finance firms who had sold PPI to their customers.
How is Plevin different to mis-sold PPI?
Originally the PPI scandal was focused on the mis-selling of PPI and whether the policy was suitable or not at the point of sale. A Plevin PPI claim will focus on whether your car finance provider took a high-level commission from your PPI premium without disclosing it. If the commission was hidden, or the commission was unfairly high, then this is deemed to be an unfair relationship between the lender and borrower and is therefore, eligible for compensation.
Plevin claims are based on a completely different area of law, namely the Consumer Credit Act 1974, so they are not subject to the FCA's PPI deadline, hence claims are still being processed today.
You can submit a claim under the Plevin ruling if:
You've never previously complained about your PPI policy, or
Your PPI complaint was previously rejected with no compensation awarded, or
You tried to make a PPI claim before August 2019 but failed due to lack of records, or
If over 50% of your our PPI premiums were paid in commission but this was not disclosed to you.
How much am I likely to get back?
Plevin claim payouts can range from anywhere between £1,000 to £40,000, with the average amount about £3,000.
How much you may receive for your Plevin PPI claim will depend on the value of your original PPI policy. If the commission charged on the PPI policy was over 50% of the cost and this was not disclosed, means that you are at least entitled to the difference in the commission back in compensation.
The FCA has also confirmed that a historic interest rate, plus 8% pa be considered when calculating the compensation claim.
MoneyPlus Legal are Plevin PPI specialists and will be able to estimate how much you could be owed based on the PPI you had.
Please note: a portion of your compensation will have to be paid as a fee to the law firm though, if your claim is successful.
What is Car Finance PPI?
Getting a loan to help us buy the things we want has become commonplace especially for big items such as cars.
Most car sales in the UK involves some type of finance. If you purchased a car in the last few years using any kind of finance from a dealership or other type of car loan, you may have been offered an option to cover your repayments, if you were ever unable to work due to illness or if you lost your job.
The cover, called Payment Protection Insurance (PPI), ensured that you did not face any penalties for missing a loan installment, by making the payment for you if you met the full criteria set by the insurance company.
When the loan was taken out, you would have been asked a few questions to assess if PPI was suitable for your needs. Sometimes the right questions were not asked, or they didn’t go into enough detail, so the assessment may not have been accurate.
Many people took out PPI policies not knowing that they could have purchased a policy from another provider that may have suited their needs better and possibly at a cheaper rate.
It is important to read the small print in these documents as this is where the qualifying criterion of the cover is set out and the circumstances in which it will pay to cover your loan. As with all insurance policies there will be a set of exclusion clauses, so it is important to be aware of what they are and if any of the exclusions apply to you.
Types of loans and vehicles PPI was sold on
The types of finance agreements that PPI was sold with include hire purchase agreements (HP) and personal contract plans (PCP).
These forms of finance are often used to purchase:
Brokers who sold PPI with Car Finance
A lot of car finance loans were set up by car dealerships and other car garages who act as brokers when arranging finance for their customers. Unbeknown to the customer buying a car, caravan or motorbike etc. PPI was often added to the loan.
Many such brokers who not only sold the vehicle but also provided the finance with the PPI were not regulated by the Financial Services Authority (FSA). The consequence of this was that these types of brokers were not covered by FSA regulations on mediation of insurance.
The situation changed when the FSA's remit was widened to include the regulation of companies who sold PPI and other insurance products, this came into effect on 14 January 2005. Therefore, all insurance providers after this date, must have procedures in place to deal with insurance complaints including PPI.
Which Lenders Sold PPI with Car Finance Loans?
The following list of car finance providers are believed to have mis-sold PPI on car finance loans:
- Bank of Scotland
- Black Horse
- Clydesdale Bank
- First Direct
- Halifax Bank
- Lloyds Bank
- Lloyds TSB
- PSA Finance UK (covers Peugeot Financial Services and Citroen Financial Services)
- Royal Bank of Scotland
- Welcome Finance
- Yorkshire Bank
How was PPI Charged on Car Finance?
There are two ways in which car finance PPI was sold and charged for but, depended on which product it was sold with; Single Premium car finance PPI or Monthly Premium car finance PPI.
Single Premium Car Finance PPI - These policies charge an upfront premium that covers the insurance cost. The premium is added to the sum borrowed and interest is then charged on the PPI premium and on the loan. The customer therefore, repays not only the monthly loan repayment but also the premium and the interest on it.
What customers may not know about single premium PPI policies is that they don't cover the duration of the loan, it usually only covers a 12-month period. Also, customers who settled their loan early, were not refunded the remainder of the single premium PPI cover that was no longer needed.
Single premium PPI on unsecured personal loans was banned by the FSA in October 2010. The reason for the ban was because the entire cost of the insurance had to be paid upfront, it meant the borrower paid much more in initial repayments than they would otherwise pay.
Monthly Premium Car Finance PPI - these are also known as regular premium PPI that are paid for on a monthly basis.
There are significant differences between this and the single premium PPI:
- Monthly PPI policies can be cancelled at any time;
- Single premium PPI can only be cancelled in the first 30 days of the policy starting and be refunded fully;
- Cancelling a single premium PPI policy after 30 days, you will only get back a proportion of the premium paid.
How we can help with your Plevin PPI Claim
MoneyPlus Legal is a Plevin PPI Claims specialist, whose core focus is on helping consumers who were sold PPI to use all available and possible options to obtain a legal remedy for compensation of undisclosed & high commission from the finance provider.
If you’re unsure whether you are eligible to make a claim under the Plevin ruling please don't worry as MoneyPlus Legal will always conduct a full review of all your PPI credit agreement(s) to establish whether there is a case for unfair relationship.
MoneyPlus legal will use their specialist 'Plevin' PPI claims experience to investigate, negotiate and settle any claim as quickly as possible. Our Plevin PPI Check and claim service is simple and completed on a no win no fee basis* and you will be kept informed throughout the claim process.
The Plevin Claims Process
Start Your Free
Plevin PPI Check
MoneyPlus Legal will call you to discuss your potential claim, confirm some details & explain the next steps to progress your claim.
Sign & Return Our Pre-Filled Forms
MoneyPlus Legal will send out a claim pack with letter of authority to sign & return back so they can start your Plevin PPI check.
Your Plevin Claim Eligibility Checked
MoneyPlus Legal will contact the lender(s) to ascertain how much commission was charged on your PPI policy & eligibility for a refund.
Ready to Start Your Plevin PPI Claim?
To find out if you're eligible to make a commission claim start your FREE Plevin PPI check with MoneyPlus Legal. We'll check your finance agreement(s) & associated PPI policies to establish if you have a valid claim against your bank or finance provider under the new ruling.
Car Finance Providers who Sold PPI
Please note: this is not an exhaustive list of all car finance providers who may have sold PPI to consumers, just the main ones.