Six million bank and credit card customers could be owed PPI compensation following a landmark court ruling.
Supreme Court judges have ruled that financial groups cannot use border protection in cases where they have secretly charged commission on PPI products.
Bank bosses had previously argued in the legal dispute that they should not have had to pay back any money from the secret commission if it had been taken more than six years ago. But the chief justices have said that the time frame is irrelevant if they deliberately hid the commission charge.
The ruling comes after a PPI customer complained to the court that she was accused of a secret 95 per cent commission on her premium.
Harcus Parker has launched a legal action group to seek compensation for those affected. Senior partner Damon Parker said: “Our group legal claim will be open to customers who have previously claimed compensation but been refused compensation, those who have not recovered all their losses, and customers who have not made a claim ever.”
He added: “Because these claims involve secret commissions, potential claimants will not know they are affected unless they check.
“We encourage anyone who thinks they may have a claim (basically anyone who has had a credit card in the past) to fill out the very simple form on our claims website (www.ppiglo.com) so we can check if they are eligible.”
He criticized the greedy banks for taking advantage of their customers. He said: “On average, they were secretly charging commissions of around 80 per cent on PPI. It was really appalling behaviour.
“Our group legal claim shouldn’t even be necessary. They should pay the customers back without the need for court action.”
The main regulation came about after PPI customer Beverley Potter complained about her PPI premium, which she did not know was a 95 per cent commission.
She took out a loan with Egg Banking plc for £16,953 and had a PPI premium of £3,834.24 added to the loan. But only £182.50 of the PPI went to the insurer and the bank put the rest in commission fees.
The bank later became Canda Square Operations Limited – Ms Potter complained to the group and was paid £3,160 on the basis that the product had been misplaced.
As this did not give her full compensation, in January 2019 she filed a claim for the rest of what she was owed based on the fact that the bank did not disclose the Commission.
Canada Square argued that because it had redeemed its loan in 2010 it could not claim back the rest of the PPI money because it was past the six-year limitation period – but Supreme Court judges ultimately ruled in their favour.
Banks have paid out around £38billion in PPI claims over the past 20 years. This new group legal claim based on breaches of the Consumer Credit Act is thought to be worth up to £18billion.
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