Susan Plevin is a 59-year-old woman who applied for credit with Paragon Personal Finance. She received a large credit, along with a large-value payment protection insurance policy from her broker. The failure of her broker to disclose his/her commission made the entire selling of the insurance policy invalid as per the 1974 Consumer Credit Act.
The act states that brokers who receive a “substantial” amount of commission are to let their clients know of the actual amount.
Financial advisers and brokers, along with bank employees, also sell PPI to clients. However, many bank employees mis-sold the insurance policy by pre-ticking the box indicating the inclusion of PPI along with other unscrupulous methods. Most financial advisers and brokers sell the insurance policy with clean forms.
Experts expected the Plevin case to inflate the number of insurance claims in the UK. However this failed to pass due to the following.
With bank employees selling a higher number of insurance policies, brokers who may have failed to disclose their commission have a smaller number. Analysts have scaled down their expected PPI bill increase from £32 billion to £25 billion.
Bank employees have sold to half of the UK’s consumer population who have taken out financing in the last two decades.
However, analysts see the PPI bill can increase to the same speculated amount upon the conclusion of the FCA’s consultation for the PPI deadline.