Insurance intermediaries owe and are owed a duty of disclosure by their customers. High Court finds the District Court judge erred in determining that a lending institution was beyond reproach in not disclosing to a borrower that he was being charged commission on payment protection insurance that he had taken out for three loans, holding that the lending institution was in breach of relevant legislation by not adequately informing the borrower of all of the transaction details.
The judge concluded that where entities are related and one is paying commission to the other, this information should be given to the consumer as they may not realise that they are essentially paying commission “on the double” to related entities. Significantly, the court went on to state that such conduct was capable of amounting to a “misleading commercial practice” under the Consumer Protection Act 2007.