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Judge Quashes Woman’s £8,000 Credit Card Debt In ‘landmark Ruling’ On Mis-selling Of Payment Protection Insurance
Judge quashes woman’s £8,000 credit card debt in ‘landmark ruling’ on mis-selling of payment protection insurance
A woman has won a landmark legal victory after a judge wrote off her £8,000 credit card debt because she had wrongly been sold payment protection insurance (PPI).
A county court judge ruled that Lynne Thorius, 49, from South Shields, was charged thousands of pounds by MBNA for an insurance policy she had never asked for. The ruling could open the floodgates for millions of pounds worth of similar claims against banks and building societies.
It is estimated that around 20 million PPI policies have been sold in Britain in the last six years alone, making this the second biggest selling insurance product on the market.
Lynne Thorius’s £8,000 credit card debt was quashed after MBNA charged thousands for an insurance policy she never asked for. ‘This is the first time that a judge has ruled on this point and will have a massive impact. Now Lynne has won, the floodgates could open for millions of other people. This is a massive victory. It will certainly change the way banks lend money and issue credit cards. MBNA thought their case was watertight but in court the legal argument absolutely white-washed them and their case against Lynne was thrown out.
The mother-of-three applied for the card – which was branded Sunderland ASC but financed by MBNA – in July 2002. She ticked the box which said ‘no thank you’ to payment protection insurance on the application form, but despite this, the policy was initiated with a £20-a-month charge.The card had a limit of £1,500 and Mrs Thorius, a cleaning supervisor, used it ‘here and there’ to pay bills and buy gifts. But the credit limit was gradually extended and before she knew it, Lynne was nearly £7,000 in debt.
With her debt soaring and with seemingly no way out, Mrs Thorius contacted a claims management company in December 2008, while MBNA launched a separate action against her, suing for arrears totalling £8,686.90.
The bank even threatened a charging order to repossess her house, even though her debt was unsecured.
In a nine-hour hearing at
1000
Newcastle-upon-Tyne County Court, Deputy District Judge Jacqueline Smart ruled that the PPI policy had been unfairly imposed.
She also threw out MBNA’s case against Mrs Thorius because they earned commission on the PPI they ‘sold’ her. It is the first time a judge has ruled such an arrangement to be in breech of the Unfair Relationships and Unfair Consumer Credit Act Section 78.
After news of the ruling broke, the FSA announced a package of tough measures to protect consumers in the PPI market. Jon Pain, FSA managing director of retail markets said: ‘Consumers should not be pressured or deceived into buying PPI and they are entitled to have a policy properly explained to them. It is unacceptable that despite previous warnings about pool sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this.’
By: Trevor007
Article Directory: http://www.articledashboard.com
Trevor Norman is Claims Manager for PPI Claim Management, regulated by the Ministry of Justice to legally represent clients who want to make PPI claims and claim back mis-sold payment protection insurance.
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