Last year, the Financial Conduct Authority (FCA) began consulting on new guidance on how firms should decide if a customer with payment protection insurance (PPI) has been treated unfairly, and it has now given clarification that means more customers can try to reclaim.
MoneySavingExpert.com has welcomed the FCA’s announcement, as we campaigned for some of these PPI customers to be written to about the update to ensure they would know they can now try to claim again.
What are the rules about PPI commission?
PPI is designed to cover your loan or credit card repayments for a year in the event of an accident, sickness or, in some cases, unemployment.
In itself, it’s not a bad product. But it’s been widely mis-sold and now, because of 2017’s ruling called Plevin, even just having had it means you’re likely due some cash back.
In 2014, a court ruling held that customer Susan Plevin was treated unfairly because she wasn’t told about the large amount of commission (71.8%) taken from her PPI payment – so this can be used as a new reason to claim for compensation.
The FCA’s Plevin rules mean that if more than 50% of your PPI’s cost went as commission to the lender, and that wasn’t explained to you, you are due back the extra above that – if your PPI was still active at some point since 2008.
The average commission banks were paid was 67%, meaning millions more people who were sold PPI are now entitled to money back. It’s worth noting that a county court has awarded a higher payment than the FCA’s above 50% threshold. See our Judge rules couple can reclaim all of their PPI commission MSE News story for more.