Wragge Lawrence Graham & Co

UK 200 2013 position: 25

Finance litigation briefing — May 2014: onus on lender to give details of cost of PPI

By Greg Standing

Failing to mention the cost of payment protection insurance (PPI) is a breach of the obligation to communicate with borrowers in a fair, clear and non-misleading way.

This was the finding of the Court of Appeal in Figurasin and another v Central Capital Ltd and another. This finding was reached despite the borrowers’ failure to read the loan documentation sent to them, which did adequately set out the cost of the PPI. The borrowers entered into a loan of £25,000 with the defendant. The offer of loan was made by one of the defendant’s employees over the phone.

The borrowers were told the cost of the loan was £393.68 per month, which included the cost of PPI. The only time the cost of PPI was mentioned separately was when the borrowers were told the premiums would be refunded at the end of the term when they would receive £8,750. No mention was made of the fact the PPI would actually cost them £12,248.40…

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55 Colmore Row
Birmingham
B3 2AS
UK
http://www.wragge-law.com/

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