A legal claim has been launched accusing banks of “unlawfully” taking billions of pounds from Payment Protection Insurance (PPI) customers through “extremely high” secret commissions.
While the initial round of PPI claims centred on mis-selling, this new action alleges banks and credit card companies “secretly” pocketed huge commissions of up to 95 percent from customers who signed up for the insurance product.
It is estimated that up to six million people will be eligible to join the group’s legal claim, a move that lawyers believe will resolve PPI claims “once and for all”.
The high levels of secret commissions are deemed to be “unfair” under the Consumer Credit Act, which means banks and credit card companies can be forced to return all of the PPI payments to customers.
Law firm Harcus Parker has launched the group legal action to bring together all of the secret PPI commission claims into one court case in a move to force the banks and credit card companies to pay back the full cost of the insurance product.
Speaking on the legal claim, which was lodged at Birmingham County Court on Friday, Damon Parker, senior partner at Harcus Parker, said: “Banks and credit card companies have known since at least 2017 that they should pay back these undisclosed commissions.
“Some legal challenges have been brought by individual customers, however, they are almost impossible to prosecute at scale. The only way through this quagmire is by allowing customers to join a group litigation claim.”
According to the firm, around 350,000 people have already applied to join the ‘no win, no fee’ group legal action. However, millions more could be eligible to claim their money back.
Mr Parker said: “For years banks and credit card companies have found ways to avoid telling customers the whole truth about the commissions they paid themselves.
“This failure to come clean about the scandal is a stain on the industry and needs to be redressed through settlement or legal means. It is no good banks continuing to blame customers for a problem that they created and have failed adequately to address.”
According to Mr Parker, customers who have previously received PPI compensation could be owed “thousands of pounds more”.
Additionally, Mr Parker said: “There will be many more customers who had their claims turned down who will be eligible under our claim. And anyone who has never made a claim but did have PPI is also highly likely to be able to make a claim.”
Who can claim for PPI secret commissions?
According to Harcus Parker, anyone falling into one of the following categories is “likely” to have a claim for PPI secret commissions:
- Those who have had a PPI claim rejected
- Those who were only paid back the amount of commission they paid over 50 percent of the premium
- Those who had PPI but never previously made a claim.
Mr Parker said: “I would urge anyone who thinks they may have a claim to fill out the very simple form on our claims website to see if they are eligible.”
