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Payment Protection Insurance Landmark Case

There is now firm evidence that Payment Protection Insurance (PPI) is being mis-sold. In a case that is described as a ‘landmark ruling’ the judge QUASHED a credit card debt of £8000. The targeting of consumers to take out inappropriate insurance products as gone on far too long. This is the first time there has been a ruling of this kind and could consequently open the floodgates for similar claims against financial institutions ordering them to pay back millions of pounds.

The ruling

For the first time a county court judge ruled in favour of the consumer due to the credit agreement being in breach of the Unfair Relationships and Unfair Consumer Credit Act, section 78.Deputy District Judge Jacqueline Smart ruled that MBNA has unfairly imposed the Payment Protection Insurance Policy (PPI). This has highlighted the strength of the legal arguments against these insurance policies.

The Success Story

Lynne Thorius from South Shields successfully claimed that MBNA had charged her thousands of pounds for Payment Protection Insurance policy she didn’t even ask for. Initially she took out a credit card with Sunderland ASC financed by MBNA in 2002. She had quite clearly refused the offer of Payment Protection Insurance (PPI) and had ticked the box stating ‘no thank you’ on the application form, yet despite this MBNA charged her £20 a month for Payment Protection Insurance (PPI). The creditor was also at fault by informing Lynne Thorius she would not have been given the card if she hadn’t agreed to taking out the insurance policy. She suffered harassment from MBNA at all hours of the day and night when she defaulted on her payments. MBNA even had the audacity to increase the amount she paid in Payment Protection Insurance (PPI) each month to £30 and subsequently refused her, when she attempted to make a claim on the insurance policy. An insurance policy that they themselves had earned commission on. Despite this, they forced her to pay for a product she did not want and was unable to use.

As well has the harassment, Lynne Thorius suffered from MBNA, she was also threatened with the repossession of her home, despite explaining to them she was having difficulty keeping up her repayments because her work hours had been reduced from full-time to part-time.

The Outcome

This case has highlighted MBNAs appalling treatment of Lynne Thorius. The courts have granted consumers’ authority to claim back mis-sold Payment Protection Insurance policies (PPI) in such a way that financial institutions cannot defend. This case demonstrates the strength of the legal arguments against such policies. This is the legal first that will help a large number of people (an estimated 40 million) sold Payment Protection Insurance policies (PPI)) in Britain alone, in the last 6 years.

The impact of Lynne Thorius’ outcome will be far reaching. It will give other consumers a legal stance when dealing with creditors who have made thousands of pounds from mis-selling insurance products. Complaints similar to the one above are not uncommon to Bournes. In such circumstance we are able to intervene and provide debt help that can prevent repossession. Our debt management plan will ensure that unenforceable credit agreements are challenged before any payment it made to creditors.

Conclusion

Payment Protection Insurance (PPI) is the second biggest selling insurance product on the market. This ruling is a legal first and considered a victory by the debt advice industry.