B - Broker as agent
12/11/14
PLEVIN v PARAGON PERSONAL FINANCE LTD [2014] UKSC 61
Non-disclosure of the amount of commissions paid in respect of a PPI policy made the creditor’s relationship with the debtor unfair and justified reopening the transaction under s 140A CCA 1974. The decision in Harrison v Black Horse Ltd (2012) that the relationship could not be unfair if the creditor had not breached duties imposed by the ICOB regulatory regime, was wrong. A wider range of considerations may be relevant to the fairness of the relationship including the characteristics of the borrower. It is a question of degree. Here the commissions were so large that the customer should not have been kept in ignorance. The creditor was responsible for making the relationship unfair by failing to disclose the size of the commissions. The creditor had no regulatory or other duty to assess the borrower’s needs. Although s 140A also covered things done on behalf of the creditor, this requires agency to be established and the independent broker could not be regarded as the creditor’s agent.
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