Payment Protection Insurance or PPI was sold aggressively by banks, building societies and lenders for decades using hard-selling tactics or in some instance lies to attach it to most forms of financial credit agreements. This included personal loans, business loans, overdrafts, credit cards, mortgages, catalogue accounts and store cards.
PPI was designed to cover your repayments if you got sick or became unemployed, but in reality, it only paid out for a limited period usually 1 year, and the maximum payout for some PPI policies was less than the cost of having it.
Common mis-selling tactics used by banks & lenders included:
- Having PPI added to your finance agreement without permission;
- Saying if you took out PPI you would get a better deal;
- Selling PPI when it was inappropriate for the individual, for example, to provide cover for ‘unemployment’ for those who were self-employed, or not asking about pre-existing conditions that could invalidate it;
- Insisting that PPI was compulsory for your finance agreement so you had to have it.
What is PPI Commission?
It has recently come to light that when PPI was sold by banks and lenders the majority of the cost was actually received in commission. So, a percentage of what you paid for your PPI premium was commission and this went to the bank or broker, rather than the whole amount going towards paying for your insurance. The findings were based on a 2014 Supreme Court case brought by Susan Plevin against Paragon Personal Finance (Plevin vs. Paragon Personal Finance Ltd), now referred to as ‘Plevin’. The facts of the case were that Mrs Plevin had been sold a PPI policy but was not told that a high percentage of the premium (71.8%) was paid in commission. The Court ruled that this made her relationship with her lender unfair under section 140A of the Consumer Credit Act 1974.
At the same time as launching the PPI deadline, the FCA introduced a new ruling for PPI mis-selling called ‘Plevin’. Under this ruling, anyone who had PPI from a bank or lender attached to an active finance product since 2008 may be owed some money. In the past, in order to reclaim any PPI, you had to have been mis-sold it. The FCA’s new rule says if over 50% of your PPI cost went as commission to the lender, and that wasn’t explained to you, you can claim back the extra above that.
Following the ruling, the FCA set out guidelines that defined high commission as being more than 50% of the cost of the PPI premium and further stated how banks should investigate and correct PPI commission.
What makes me eligible for a PPI commission claim?
If any of the following scenarios apply you may be eligible to make a claim:
- Your credit agreement was covered by section 140A of the Consumer Credit Act 1974
- You weren’t told about the commission that was being charged on your policy
- The commission paid was more than 50% of your premium with the average commission being charged at 60-70% of premium being paid by most banks and lenders.
How to make a complaint about PPI commission?
To help you we’ve set up a simple and easy way to complain about the commission on your PPI policy. Just complete the short form above with your contact details and we will call you back to get more details about your PPI policy and exact circumstances. We’ll then register a formal complaint with the bank or lender on your behalf to ask them to investigate if you were charged a high level of commission on your PPI policy premiums.
Please note: If you have previously made a complaint about PPI on a product you had with bank or lender, you should use the PPI commission form to start your high commission claim.
How do I start the process with PPIClaims.com?
If your PPI claim has already been rejected
If you have already raised a previous complaint for mis-sold PPI which was not upheld, and you wish to raise a further complaint relating only to the commission charged on your PPI policy, learn more about PPI High Commission claims.