Regulator move prompted by Supreme Court case involving loan company Paragon
The FCA is considering whether to toughen up the rules on the sale of payment protection insurance (PPI) following a case involving loan company Paragon.
In a statement this morning, the FCA says it is considering whether additional rules or guidance are required.
The regulator said: “In November 2014, the Supreme Court ruled in Plevin v Paragon Personal Finance Ltd (Plevin) that a failure to disclose to a client a large commission payment on a single premium PPI policy made the relationship between a lender and the borrower unfair under section 140A of the Consumer Credit Act 1974.
“As a result, the FCA is considering whether additional rules and/or guidance are required to deal with the impact of the Plevin decision on complaints about PPI.
“The FCA will be engaging with relevant stakeholders in the coming months in respect of this and it expects to announce its views on this, including next steps, at the same time as existing work.”
In January, the FCA announced that it would be collecting evidence on current trends in complaints on PPI.
The FCA said it would consider whether further interventions may be appropriate - which could include a consumer communication campaign; a possible time limit on complaints; or other rule changes or guidance - or whether the continuation of the PPI scheme in its current form best meets its objectives.