The Sunday Telegraph - Money & Business
Court ruling opens door to more PPI payouts after Aug 29 deadline
The official deadline for making a claim for mis-sold payment protection insurance is just days away – but a major court victory could allow consumers to earn a payout from their bank after that date.
The Aug 29 cut-off was imposed by the City watchdog, the Financial Conduct Authority (FCA), to draw a line under a mis-selling scandal that has resulted in the payment of billions of pounds in compensation. The intention is that claims against banks and financial institutions are made before the deadline.
Yet a recent court case could open the door to future payouts, according to lawyers.
Azra Akhtar launched a legal challenge against Welcome Financial Services, a loan provider, in which she argued that it had been paid excessive levels of commission for selling her the insurance. This constituted an unfair relationship, the court said.
She was awarded the entire amount the bank received in commission and refunded the amount she paid into the policy with interest, receiving £3,595 in total.
This ruling followed a highprofile case in 2014, known as “Plevin”, which found that PPI had
been mis-sold because banks were paid commission by insurers which was, in some cases, worth 80pc of the value of the policy.
But as Telegraph Money reported in March, banks will typically refund customers only for the amount above the 50pc commission level, unless a legal challenge is mounted.
Glyn Taylor of APJ Solicitors, which represented Miss Akhtar, said: “We welcome this decision as previous cases have not gone far enough, still leaving people out of pocket for a policy they didn’t need.”
Mr Taylor said that in cases where an unfair relationship existed, as in this instance, banks could be challenged in court after the FCA’S deadline.
“The Aug 29 deadline is for PPI that was mis-sold by lenders, but this case argues that, if an unfair relationship is proven, claimants can still recover the PPI premium after the FCA’S deadline.
“More importantly, if a broker arranged the loan, undisclosed commissions paid to the broker can also be recovered,” he said.