Top banks could face millions in new PPI claims over commission
Britain’s top banks are facing further fall out from the mis-selling of payment protection insurance (PPI).
The latest potential threat comes from a case brought by lecturer Susan Plevin, over a loan and PPI policy taken out in 2006. She was unaware that more than 70 per cent of the commission she paid on the insurance contract ended up in the hands of her lender, Paragon Personal Finance, and a broker.
The Supreme Court ruled last year that the commission was in breach of the Consumer Credit Act, as it had not been disclosed to Plevin.
A recent study by independent researchers Autonomous Research, chaired by former City minister Lord Myners, said that UK banks could face a multi-billion pound bill if the judgment were applied across the financial industry.
An HSBC spokesperson told Morning Wire: “HSBC is assessing any possible consequences of the case on its historical sales of PPI. At 30 June 2015 no adjustment to the PPI provision had been recorded in relation to the matter.” HSBC has set aside around £790m in provisions in the six months to 30 June. Barclays and Lloyds declined to comment.