The Financial Conduct Authority (FCA) is considering whether additional rules or guidance will be required to deal with the impact of a case regarding Paragon Personal Finance on complaints about PPI.
It comes after the Supreme Court ruled in November 2014 that a failure to disclose to a client a large commission payment on a single premium PPI policy made the relationship between a lender and the borrower unfair under the Consumer Credit Act 1974.
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This decision was made in a case between a Mrs Plevin and Paragon Personal Finance (Plevin v Paragon Personal Finance). This case was in relation to a personal loan Plevin took in 2006 for £34,000, through credit broker LLP Processing (UK).
It was recommended she also take out PPI, which had a premium of £5,780. A total of 71.8% of this was commission, split between LLP and Paragon.
Plevin was not informed about the amount of the commission, and she argued this resulted in an unfair relationship.
LLP settled out of court, however, the case with Paragon continued, until the November 2014 Supreme Court Ruling.
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By GlobalDataIn January, the FCA revealed it was collecting evidence on current trends in complaints on PPI, with a view to giving an opinion on the evidence in the summer, when it would make its intentions for the next steps apparent.
The FCA has now said it will be engaging with relevant stakeholders in the coming months in respect to the above, and that it would announce its views on the Plevin v Paragon Personal Finance case, including the next steps, at the same time as its existing work.
