Court rul­ing opens door to more PPI pay­outs af­ter Aug 29 dead­line

The Sunday Telegraph - Money & Business - - Fame & Fortune - Adam Williams

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.

PPI was sold on an in­dus­trial scale by banks in the Eight­ies, Nineties and 2000s

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