The law relating to PPI claims changed dramatically in 2014 with the Supreme Court decision in Plevin v Paragon Personal Finance Ltd. In Plevin, the Court was not concerned with whether or not Ms Plevin had been ‘mis-sold’ the policy, rather they looked at the commissions the lender had received from its insurer, Norwich Union, in respect of the PPI.

The Payment Protection Insurance premium of £5780 was provided to Paragon by Norwich Union. Of that sum, a staggering 71.8% was commission, meaning the true cost of the policy was just £1629.96. The £4150.04 in profit was split between the lender and broker, £2,280 and £1870 respectively. Paragon did not inform Ms Plevin that a commission was to be retained, nor did they disclose the amount received.

The Court used the Unfair Relationship Provisions and found that the failure to disclose the commission rendered the relationship unfair pursuant to the Act.