ABOUT THE CLAIM
PPI is a kind of insurance contract that can be taken out with a loan, credit card, mortgage or other financing (such as catalogue or store accounts, or car financing). It was supposed to provide protection to individuals to ensure that credit repayments could be met if they were not able to work, due to illness or redundancy. But it did not work like that:
• Bank employees were heavily incentivised to sell PPI;
• taking out PPI was often made an unreasonable condition of getting a loan;
• PPI was ‘sold’ to credit card customers who did not know they had agreed to take out the policy; and
• The terms of the PPI policy were not made clear; but had they been, the policy would not have been wanted: the policy was frequently not suitable, either because the customer would never be eligible to claim – if, for example they had a pre-existing medical condition, were retired or were self-employed or unemployed – or because they already had equivalent cover through other means such as their employment.
• Most importantly, the premiums were extremely expensive. Typically, more than 75% of the amount paid consisted of a secret commission paid to the bank by the insurer, which was often a related party. These secret commissions are at the heart of the claim. There is Supreme Court authority for the fact that a secret commission charged in connection with a PPI policy makes the lending relationship ‘unfair’ and gives rise to a claim under the Consumer Credit Act.
PPI may sound like an old story, and it has a bad name because of the methods by which Claims Management Companies (CMCs) have advertised for clients in the past, and the sloppy way in which some have dealt with the claims – but that does not negate the fact that millions of customers are owed compensation.
In recent years, claimant firms have brought claims one by one and have struggled against the superior firepower of the defendants and with the potential volume of claims.
This group action brings a fresh and rigorous new approach to the scandal which will, we hope, deal with the issue once and for all. As a result of members of the public standing together and advancing a collective action, we hope that the banks and credit card companies will be persuaded to face up to their liabilities and pay what they owe without the need for full-scale legal action. But if they will not, a group claim represents the best and most efficient way to cut through the issues in the claims and force the defendants to pay compensation.
CAN I JOIN?
Anyone who had PPI but who has not been compensated or who has not been compensated fully can join the claim. If you believe that you may have had PPI, we can check for you.