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PPI complaint handling update

Non-disclosure of commission (Plevin vs Paragon)

Background

On 12 November 2014, the Supreme Court ruled in Plevin vs. Paragon Personal Finance Ltd. (Plevin).

They judged that, failure to disclose to a client a large commission payment on a single premium Payment Protection Insurance (PPI) policy, made the relationship between the lender and borrower unfair under section 140A of the Consumer Credit Act 1974.

As a result, the Financial Conduct Authority (FCA) announced that it may enforce additional rules and/or guidance to providers, helping them to manage the impact of the Plevin ruling on certain PPI complaints.

The FCA initially produced a consultation paper in November 2015, setting out proposed rules and guidance, with an invitation for interested parties to respond by 26 February 2016.

In August 2016 the FCA produced a second consultation paper, they considered the responses received and planned to make a further announcement in the first quarter of 2017.

 

Update – March 2017

On 2 March 2017, the FCA released a policy statement (PS17/3) announcing new rules and guidance about the handling of PPI complaints, which will come into effect on 29 August 2017. MBNA are reviewing these now, with a view to implementing them as soon as possible.

If you’ve previously had a PPI mis-sale complaint upheld in your favour, the redress you received included any commission, which means you’re not due any further compensation and there’s no further action to take.

If you’ve previously had a PPI mis-sale complaint declined and you’re impacted by the non-disclosure of commission (Plevin), we’ll contact you by the end of 2017. That also goes for non-disclosure of commission complaints that were put on hold whilst we were waiting for rules and guidance from the FCA.

Timeline of events

12 November 2014

Supreme Court ruling.

27 May 2015

Statement released by the FCA.

2 October 2015

Statement released by the FCA.

26 November 2015

Consultation paper produced by the FCA.

26 February 2016

Deadline for interested parties to respond to the consultation paper.

02 September 2016

Second consultation paper released by FCA.

11 October 2016

Deadline for interested parties to respond to the second consultation paper.

04 January 2017

The FCA will make a further announcement in the first quarter of 2017.

02 March 2017

New rules and guidance published by the FCA which come into effect on 29 August 2017.