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October 4, 2017 
Daniel Lee In 2014 Mrs Susan Plevin took Paragon Finance to the Supreme Court and won her case.
The case centred around Paragon Finance failing to advise Mrs Plevin what commission payments were being made by selling her a PPI policy.
Mrs Plevin argued that, by Paragon failing to provide her with this vital information, she was denied the opportunity to evaluate whether the PPI policy represented value for money.
The Judge found in favour of Mrs Plevin, which has subsequently seen the Financial Conduct Authority (FCA), having to change its rules that providers must abide by when dealing with PPI complaints.
In the case of Mrs Plevin it was discovered that 71.8% of the £5,780 PPI policy, which was added to her loan, was pure commission.
Yes, that is correct, £4,150 was commission for selling the PPI policy, an utter disgrace.
Was it any wonder that banks mis-sold tens of millions of PPI policies given the commissions and profits on offer?
Was it any wonder that banks decided not to tell customers how much commission and profit they were making from the fraud?
Fraud may sound like a strong word to use, but that is quite simply what it was, fraud on a huge scale.
Some could argue that the regulator turned a blind eye and was therefore complicit in the fraud, whilst others argue the regulator was simply not fit for purpose and was unaware of the scam, but we’ll let you decide on that.
It took the FCA almost two and a half years to produce new rules for banks to follow when dealing with complaints surrounding the Plevin case.
It was found that the average commission taken by banks and providers for selling the toxic product was approaching 70%.
The FCA, in their wisdom, have suggested that anything over 50% commission is deemed to be a ‘tipping point’, at which the customer should have been informed.
50%!!! So, the FCA argue that had Paragon only taken £2,890 of the £5,780 PPI policy they didn’t need to tell Mrs Plevin.
Utter lunacy. You tell me any other industry where the regulator deems 50% to be a fair amount of commission, and the customer doesn’t need to be advised.
New rules allow banks to only offer the difference between 50%, up to the percentage of commission taken, so Mrs Plevin would only have been entitled to a refund of 21.8% given the commission taken by Paragon was 71.8%.
The new rules have been welcomed by some consumer champions as it provides hope to millions of previously rejected complaints.
Banks have ‘agreed’ to write out to millions of consumers who had their complaints rejected, but whose claims may now fall under these new rules.
We just hope that these letters being sent to customers are not lost in the post, or sent to old addresses in error, but we’ll have to rely upon the banks and the regulator to ensure this doesn’t happen, which given their track record I am sure won’t be an issue!
With the PPI deadline announced for 29th August 2019, there is a wave of advertisements encouraging those who haven’t checked whether they’ve been sold PPI to do so.
The FCA expect a surge in claims being made as the deadline approaches, but this carries a risk.
Banks have consistently handled valid claims unfairly, which is proven by data collated by the Financial Ombudsman Service (FOS), which has always shown that over half of rejected claims are rejected unfairly.
The problem is that the fines handed to banks for failing to handle claims fairly do not act as a deterrent, given the billions the banks have saved themselves by rejecting valid claims.
Given banks penchant of putting the consumer as a last priority in favour of profits, coupled with the regulators continued failure to bring them into line, there are clear dangers to new claimants.
We are starting to see banks rejecting claims, but upholding part of the claim surrounding the Plevin rule and paying out partial compensation.
On the face of it the bank appears to be making an offer of compensation, but to the trained eye this can be spotted and the rejected part of the claim challenged or escalated to FOS for review if required.
However, can the everyday man on the street navigate through the jargon within a decision letter to uncover that the compensation being offered is potentially not a fair amount?
Banks have history of attempting to only offer partial compensation awards.
Shock horror I hear you say!
Banks previously attempted to make partial offers by suggesting an alternative PPI policy would have been more suitable to the customer, and that a refund of the difference in the costs of the policies would be fair.
How much banks saved by customers accepting this is open to debate, but we wouldn’t be surprised if the savings ran into billions.
Not bad when you consider the total fines handed to banks regarding the PPI scandal is less than £200m.
So who is to say banks won’t seek to try and take advantage of what should be a win for the consumer, instead turning it into a win for their profit margins and shareholders?
Is it a coincidence that the FCA have announced these new rules, over two years since the court ruling, to coincide with the deadline announcement and subsequent rush of claims?
Now call me a cynic if you wish…..
Obviously we would invite you to ask Your Money Claim to act on your behalf, but we understand some of you out there would prefer to carry out your own investigations and manage your own claims.
If you have chosen not to use the services of a reputable Claims Management Company, generally not one that cold calls or makes any unsubstantiated statements, and a bank makes an offer of compensation to you, we recommend you read the letter thoroughly.
Look for any hint that the bank has rejected the main part of the claim, and are only making a partial offer based on unfair commissions.
If you are unsure as the jargon used renders the letter difficult to comprehend, or you believe you have been made an unfair partial offer, escalate the claim to the Financial Ombudsman Service for review within six months from the date of the letter.
Each referral to the Ombudsman can cost the bank, so if enough people do it the banks may see that it is no longer financially viable to look to cheat customers out of compensation that is rightfully due.
Could banks benefit from Plevin PPI ruling?
September 22, 2017 Daniel Lee At Your Money Claim, our aim is to fight your corner. Whether that’s helping you claim PPI compensation or filling you in on the latest products that could impact your pocket, we’re here to help.
Smart meters are the latest version of gas and electricity meters and these digital devices are designed to automatically read your meter, resulting in more accurate energy bills. But are they as good as they sound? By 2020, every home will be offered a smart meter by their energy supplier, so we look at whether a smart meter will cost or save you money.
With a smart meter, you are only charged for the electricity and gas you use. This means no more over-priced bills based on estimates. With constant measurement, you can save yourself the cost and hassle of an unexpected excessive payment. Although energy companies refund differences, smart meters reduce nasty surprises.
The main way that smart meters can help you save money is by allowing you to monitor your usage. Being able to easily see how much energy you are using can help you consciously reduce it. This is great for the environment, as well as your bank balance.
Although the smart meter offers you an opportunity to save, you still need to be willing to alter your usage to see the benefits. Even on a standard meter, turning off unused electronics, switching off lights or putting on warmer clothes instead of central heating could still help you save money. The advantage of a smart meter is that you don’t have to wait for your bill to adjust. The smart meter’s running total can also make motivation easier.
While you can control how much you use, the estimated savings are modest. According to Money Supermarket and the Department for Business, Energy and Industrial Action every household will be annually saving £26 by 2020, £33 by 2024 and £43 by 2030.
Any saving no matter how small is surely a good thing though. Or at least it would be if you didn’t have to pay for your smart meter…
You are never technically charged for a smart meter – all changeovers come with free installation and no upfront costs. Sounds great, right? But there is a catch.
The smart meters cost up to £200 each and this will be absorbed by households – not energy companies. Suppliers are currently adding approximately £6 a year extra to energy bills to cover the price. This reduces the amount you can save with a smart meter.
However, the good thing about this method is that there’s no prohibitive one-off cost. You do not need to outlay a large amount of money to make a small annual saving. This gives everyone equal access to a new meter.
By 2020, the Government aims for every home in the UK to be offered a smart meter. However, some experts say this target is overambitious and there may be a delay. If you want one sooner, contact your supplier to see if it’s possible.
If you decline a smart meter, there are no financial advantages as everyone still pays the rollout cost. However, if you do say no, current advice is that getting a smart meter later will remain free so there’s no rush if you’re unsure. Although once most people transition, there are warnings that certain (and potentially cheaper) tariffs may not be available to those who do not switch.
One vision for the future is that we will live in ‘smart cities’. This involves the Internet of Things (IoT) becoming part of everyday life. The IoT is all about ‘things’ connected to the internet, from self-driving cars to devices that help you locate misplaced keys. Today, we can already see how the IoT connects with energy. For example, there are apps that allow you to adjust your heating or turn off electrical appliances when not at home. Smart meters naturally compliment this. As devices continue to interact more intelligently with each other, we will hopefully have more ways to save both energy and money!
Although a greener future could mean a cheaper one, there are concerns that energy suppliers will eventually profit from smart meters. This is because smart meters give these companies more data than ever before (although you can edit your permission levels). This data could then be used to adjust charges, such as charging more for peak times.
Although smart meters are not a money saving guarantee, they are the future. The best way to save money on your energy bill is to simply use less. You can easily offset your £6 annual charge by just switching off unused electrical goods. If you have a smart meter, use it to monitor your usage but don’t expect it to reduce your bill without making an effort.
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September 20, 2017 Daniel Lee Microloans can be an ethical way to lend money. It’s hard to think of loans as ethical due to the recent scandal of extortionate interest rates on so-called payday loans (as well as PPI mis-sold on repayment plans, of course). However, microloans offer a valuable and much needed service.
If you feel you were mis-sold PPI as part of an unethical loan then you may be entitled to a claim. You can find out if you qualify for a claim here.
Meanwhile, if you’re looking for an ethical loan, microloans may be the answer. We look at how they work and how you can get involved.
A microloan is exactly what it sounds like – a small loan. This is often short-term and loaned to an entrepreneur who is either living in a developing country or will struggle to get traditional finance due to other factors, such as gender, race or income level.
The UK’s MicroLoan Foundation was founded in the late 1990s. This is a charity that gives small business loans to women in Malawi and Zambia in Southern Africa. MicroLoan Foundation now also operates in the US and Australia, with its international organisations also focussed on supporting female African entrepreneurs.
These are two examples of large organisations but the industry is expanding, allowing anyone to get involved. Organisations such as LendWithCare.org and Kiva mean anyone can be a microloan lender – including yourself! These work similar to a crowdfunding model but instead of donating, you are lending.
Microloans work on the same principle as standard loans – the borrower takes an amount of money and agrees to pay this back over a set amount of time. Although the loans help those who cannot get traditional finance, this is still a loan and not a charity donation.
And with loans, come interest rates. For some people, this may cloud their view of microloan lenders as ethical. However, The MicroLoan Foundation has defended the microfinance industry’s decision to charge interest, explaining:
“The microfinance sector is broadly united in believing that charging market-related interest rates is not only appropriate, it is essential in most circumstances. Organisations that offer loans at below market rates risk destabilising the sector in the country where they work with an unsustainable business model”.
Although microloans are sometimes defined as “low interest”, this is not always correct. In fact, the interest rates are often higher than usual. The idea of ‘high interest’ and ‘ethical’ together will sound alarm bells for many. However, The MicroLoan Foundation explains that this is due to it costing more to administer small loans, inflation and bank rates often being high in developing countries and both the cost and risk of serving microfinance clients being higher than conventional lending.
However, despite The MicroLoan Foundation’s position, there are some members of the microfinance industry who disagree. Kiva and its lenders, for instance, do not collect any interest on loans.
Although microloans usually feature interest rates, they are still an ethical option. While payday loan companies take advantage of the vulnerable, microloans seek to empower entrepreneurs by giving them an opportunity that traditional banks refuse. The money given to a small business is not a gift, it’s a loan.
As the Microloan Foundation strapline says, it’s about “Giving a hand up, not a hand out”. Those who borrow will need to pay this back (and probably with interest) but without this service, furthering their businesses would be impossible.
As LendWithCare.org and Kiva work similar to crowdfunding, they need a ‘crowd’. And you can be part of this.
Both organisations let you browse people’s business goals before deciding who to lend money to. The entrepreneurs will have a set goal they want to raise and can collect loans from various people. So, there’s no need to be put off by ambitious goals – you can get involved by lending just a small amount of the total. LendWithCare.org’s minimum is £15, while Kiva’s is $25.
There is an element of risk in the event of a loan being defaulted but you should expect your money to be returned. How long this takes depends on the individual agreement. Both organisations recommend keeping the cycle of help going by reinvesting when you receive your money back, but you can withdraw any time a loan comes to the end.
You can also help support the microloan industry by donating to charitable organisations, such as Microloan Foundation. Although you will not know exactly whose business you help this way, you are helping to fund the charity. Microloan Foundation state that just £40 can help a woman start her own business.
Of course, you can be on the ‘other side’ of a microloan too and receive one. There are a number of companies in the UK who will offer microloans to small businesses and start ups, such as Finance Wales and The North West Fund.
So, whether you’re in need of a loan for your own business or want to support an entrepreneur, the microloan industry may be able to help.
If you’ve had a loan where PPI was mis-sold alongside it then you may be entitled to a claim. Don’t let unethical lenders get the better of you – claim now.
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