Six million bank and credit card customers could be owed PPI compensation after a landmark court ruling.
Supreme Court judges have determined that financial groups cannot use a limitation defence in cases where they secretly charged a commission on PPI products.
Bank bosses had previously argued in the legal dispute that they should not have to pay back any secret commision money if it was taken more than six years ago. But top judges have ruled the timeframe is irrelevant if they deliberately concealed the commission charge.
The ruling comes after a PPI customer complained to the court as she was secretly charged a 95 percent commision on her premium.
Harcus Parker has launched a group legal action to get compensation for those affected. Senior partner Damon Parker said: “Our group legal claim will be open to customers who have previously claimed but were refused compensation, those who did not recoup all of their losses, and customers who have never made a claim.”
He added: “Because these claims are about secret commissions, potential claimants will not know they are affected unless they check.
“We would urge anyone who thinks they may have a claim (essentially, anyone who had a credit card in the past) to fill out the very simple form on our claims website (www.ppiglo.com) so that we can check if they are eligible.”
He slammed 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 really was outrageous behaviour.
“Our group legal claim should not even be necessary. They should just pay back the customers without the need for court action.”
The key ruling came about after PPI customer Beverley Potter complained about her PPI premium, which unknown to her was 95 percent commision.
She took out a loan with Egg Banking plc for £16,953 with a PPI premium of £3,834.24 added to the loan. But just £182.50 of the PPI went to the insurer while the bank pocketed 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 the product was missold.
As this did not fully compensate her, in January 2019 she filed a claim for the remainder of what she was owed based on the fact the commission had not been disclosed by the bank.
Canada Square argued that because she had redeemed her loan in 2010 she could not claim back the rest of the PPI money as it was past the six-year limitation period – but the Supreme Court judges ultimately ruled in her 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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