Hidden Credit Card / Loan Charges

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While the August 2019 deadline for submitting mis-sold PPI claims to the Ombudsman has passed, claims can still be pursued if the commission earned by the lender was not revealed to the customer when starting a credit agreement.

Most credit card companies and lenders with PPI earned hidden commission of around 70% of the PPI premium.

If you have had one or more credit cards or other loans over the last 12 years, there is a good chance there was PPI added to it, now entitling you to be reimbursed for these hidden commissions.

As an example, one of our clients had a credit card for five years and is reclaiming £12,000 in hidden commission payments. We could pursue such a claim for you on a “No Win, No Fee” basis.

If you would like us to look into if you eligible, please give us a call or email and we can check if there was PPI commission earned by the lender and how much you could claim. We can do this for free and without obligation and if you are eligible, we can then offer you a “No Win, No Fee” Agreement.

According to Financial Conduct Authority (FCA) figures, British banks and other financial providers paid approximately £40 billion in redress to consumers over the course of the Payment Protection Insurance (PPI) scandal. The FCA’s figures, however, do not include sums paid out prior to 2011. The Money Saving Expert website estimates that the total redress paid out could, in fact, be in excess of £50 billion.

The chances are that you have heard about PPI. You probably also already know that the deadline for complaining to a business about mis-sold PPI has expired. In the vast majority of cases, consumers have been unable to complain about mis-sold PPI since 29 August 2019.

However, what you might not know is that many individuals who may have thought they had missed the deadline, or have previously had a claim for the mis-sale of their policy rejected, may still be able to make a different type of claim and recover the damages they might be entitled to.

What was PPI?

PPI was a financial product sold alongside a variety of personal and business loans, credit cards, store cards, hire-purchase agreements and mortgages. PPI was designed to insure credit repayments in certain circumstances where the policyholder couldn’t make them, for example, if they were made redundant or couldn’t work due to an accident or illness.

Whilst there was nothing wrong with the concept of PPI itself, many consumers were mis-sold. The sale of the policies was heavily commission driven and in many cases the large commission fees received by the salespeople were not disclosed to their customers. Policies were sold that would not cover the policyholder’s particular circumstances, for example, if you were unemployed, you would not be able to claim for losing a job.

A national scandal

The FCA believes that as many as 64 million PPI policies were sold in the UK. These policies were mostly sold between 1990 and 2010. If you have still got your old credit agreements or statements, you can check to see if PPI is mentioned on them. Some businesses used different names for PPI, which may include; “credit card repayments cover”, “credit repayment protector”, “creditcare”, “loanguard,” and “creditguard”.

Different types of policies

If you had PPI, there are different ways you might have paid for it, depending on what it was sold with. On some personal loans, the whole cost of the PPI was added upfront to the amount borrowed. The borrower would then pay it off over the term of the loan, including interest added to the premium. This type of ‘single premium’ PPI policy was banned in 2009.

On other loans, including mortgages and credit cards, borrowers mostly paid for their PPI in monthly instalments separate from the credit it was bought with. PPI policies sold with credit cards were normally paid for by monthly premiums, which were added to the monthly card balance. The cost of the premium was a percentage of the total balance owed for that month, and, if the entire balance was not repaid, then interest would be added.

Plevin v Paragon Personal Finance Limited

In November 2014, a college lecturer named Mrs Susan Plevin won her case in the Supreme Court.

In 2006 Mrs Plevin had been sold a PPI policy designed to cover the repayments on a secured loan. It subsequently came to light that, unbeknownst to Mrs Plevin, nearly three quarters of the premiums she had paid under her PPI policy (71.8%) were actually commission payments to her lender and broker. Mrs Plevin alleged that these ‘secret commissions’ made the loan unfair.

Sections 140A to 140D of the Consumer Credit Act 1974 applied to Mrs Plevin’s loan and the PPI policy. These sections allow a court to reopen a credit agreement which is unfair because of any of the terms of the agreement or a related agreement, the way in which the creditor has exercised or enforced their rights, or any other thing done (or not done) by, or on behalf of, the creditor.

The Supreme Court agreed with the argument advanced by Mrs Plevin. In its judgment it stated that the relationship between her and her lender was unfair, due to the non-disclosure of the commission payments and the large percentage of the PPI premium that was paid as commissions.

Do I have a Plevin claim?

Although the PPI deadline has passed, Plevin claims are not subject to that deadline. This is because a claim can be based on the Consumer Credit Act 1974, not the mis-sale of the policy itself. A Plevin claim does not consider whether the PPI policy was suitable. The claim is based solely on the lender’s failure to disclose the secret commission, thus making the relationship unfair.

However, not everyone who had a PPI policy will be affected. Most importantly, if you have already had a full refund due to the mis-sale of a policy then you will have already received repayment of all of secret commission as part of that redress.

Additionally, a Plevin claim can only be made if:

• You took out the credit the PPI was sold with (for example, a loan or credit card) on or after 6 April 2007.


• If you took out the credit the PPI was sold with before 6 April 2007, it was still running on or after 6 April 2008.

Typically, a Plevin claim is quantified by reference to the amount of secret commission paid by the borrower without their knowledge and redress in this sum can be sought. In the Plevin case itself the commission was 71.8%, however, the level of commissions can vary greatly and so the particular circumstances of your loan or credit card have to be considered.

What to do next

As the PPI deadline has expired, consumers cannot utilise the Financial Ombudsman Service in order to make a Plevin claim. Certain other legal time limits are likely to apply and each case if different and must be considered on its own facts.

If you think you might have a Plevin claim, please telephone us for free, without obligation advice on 0800 152 2620 or fill in the short enquiry form on the right and we’ll call you back.

What Do We Charge?

In appropriate cases, we can offer an absolute and guaranteed No Win, No Fee agreement, it’s that simple. If successful, we take a percentage fee of the award of compensation. If unsuccessful, our clients pay us nothing.

Tipping point offers

After the Plevin case, the FCA published rules and guidance relating to secret commissions. The FCA rules stated that if the commission made up more than half of the cost of the PPI, and this wasn’t made clear to the borrower, the lender should refund to the borrower anything paid over 50%. This is known as a ‘tipping point’ offer and you may have already received this redress yourself via a scheme set up by the FCA in August 2017.

In our view, the fact that a borrower has received redress from the FCA scheme should not be taken to be in ‘full and final settlement’, especially when all the creditor has done is meet its regulatory obligations. We will still consider claims where a consumer has accepted a tipping point offer and can often pursue a claim for the balance of the secret commission.


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