The Sunday Telegraph - Money & Business

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

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

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