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The Doran v Paragon Personal Finance Decision & PPI Claims


The Plevin ruling has had a massive impact on how claims should be assessed by lenders and led to the FCA setting out new guidelines. They defined high commission as being more than 50% of the cost of the PPI premium. This meant that claimants who had their original mis-selling claims turned down could go back to their loan provider and demand they be re-examined.

It has since been established that on average the amount of commission paid to banks was 67%.

You may be owed the extra money over that cost if you paid high commission and this wasn’t explained to you, and if the agreement was covered by s.140a of the Consumer Credit Act 1974.

Following on from the Plevin, another case brought by Doran v Paragon Personal Finance was heard at Manchester County Court on 26 June 2018. The reason for the claim centred on the amount of commission paid.

The facts are that Christopher and Joanne Doran had entered into a £40,500 fixed term credit agreement in June 2004. Out of the amount borrowed, £30,000 was for a personal loan, the remaining £10,500 was a PPI premium.

The PPI insurance company paid Paragon £7,985 in commission and profit share that totalled 76% of the premium.
District Judge Pearson’s decision was that the Doran’s, who were mis-sold PPI, would not have taken out the PPI policy had they known how much the level of commission was.

He stated, “Without disclosure of the level of commission, the person in the position of the Claimants has simply no way of knowing that most of the money which they think they are paying to obtain the benefit of a PPI policy is in fact going to the lender.”

The Doran’s were entitled to receive all the 76% commission they paid unknowingly, plus interest. By coming to this decision Judge Pearson has rejected the FCA’s guidance and were awarded all the sales commission they paid plus interest for a policy, a total of £17,345.


Read the Full Doran vs Paragon Judgement (26/06/2018)

What is the effect of this case?

The impact of the Plevin case on PPI claims was significant as customers who previously had their cases rejected could ask for them to be reconsidered on the commission basis.

The Doran case could mean that lenders may face more claims, and for larger pay-outs, than previously envisaged.

It is unclear on whether Paragon Personal Finance will appeal the decision, but they are considering their position.

However, it must be noted that customers who have already been successful in their claims for mis-selling cannot claim under the Plevin rules. This will still apply after the recent Doran case. Lenders will only consider claims for undisclosed commission if the customer has been rejected for a mis-sale.

Regulators estimate that approximately 64m policies were sold, out of which around 45m were sold by banks with a net premium value of approximately £44bn and with statutory and annual interest added the total bill will be nearer the £100bn mark. No one really knows how many of these policies were mis-sold. The FCA initially estimated it affected three million people. However over 12 million people have so far received compensation.

Doran v Paragon Personal Finance Decision – Updates

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PPI Claims for Deceased Persons

Deceased Persons

If a PPI policyholder is deceased, any money owed to them becomes part of their estate, so whoever inherits the estate is entitled to make a PPI reclaim. This can be done by an executor or the person appointed to carry out their wishes after death. We automatically assume that reclaiming mis-sold Payment Protection Insurance (PPI) for deceased parents and grandparents may not be possible due to the passage of time.

However, the truth of the matter is it is quite straight forward to make a successful claim for mis-sold PPI for someone who is deceased.

To reclaim mis-sold PPI start with a FREE PPI check** with us today.

Armed Forces Personnel & PPI

Armed Forces PPI

Armed forces personnel have cover for sickness, accident & unemployment built into their salaries. This protection means that if a member of the armed forces was unable to work due to one of these reasons, they would still be able to meet any mortgage, loan or credit card repayments they had. So any PPI insurance policies would NOT have been appropriate. To find out if you can reclaim for mis-sold PPI, start a FREE PPI check** with us today.

Business PPI Check and Claims

Business PPI Claims - Mis-sold Payment Protection Insurance

Business PPI - Like most consumer PPI policies, business PPI also know as commercial PPI was sold alongside secured and unsecured loans, overdrafts, credit cards and mortgages. Business Loan Repayment Insurance is a type of insurance policy sold alongside commercial loans, including Fixed Rate Loans, Variable Rate Loans and Treasury Loans. If you had a commercial or business loan between 1988 and 2014 you may be eligible for a PPI refund. Start a Free Business PPI Check and find out if you have mis-sold PPI to reclaim.