A national newspaper is claiming the Britain’s banks are trying to block a wave of new PPI claims.
Express consumer champion Dean Dunham claims: “Banks are now trying to stop millions of these new claims coming forward from customers by deliberately ramping up court costs with expensive barristers, appealing decisions to prolong the process, and trying to gag successful claimants.”
The new claims are not affected by the PPI deadline of August 29th last year because they involve the amount of commission paid by consumers when they bought their policy and are going through the courts.
Back in 2014 a Supreme Court ruling said that because she was not made aware of the 72% commission she had paid on her policy that college lecturer Susan Plevin was due to a refund of the excess commission. A later ruling by the Financial Conduct Authority (FCA) limited the amount payable to anything over 50%.
But a second landmark case brought by Christopher and Joanne Doran in July 2018 at Manchester County Court found the couple were entitled to the whole of their PPI costs back, plus interest, on the basis that they would never have bought the policy if they knew they were paying so much commission. The couple were awarded more than £17,000.
The average payout in such claims is around £4,500. They are brought under the Consumer Credit Act of 2006 which means that anyone who purchased PPI from 2007 onwards and believes they may have paid excess commission is entitled to make a claim.
It doesn’t matter if they have claimed before under mis-selling rules and received a payout or partial payout, had their claim rejected or even didn’t make one at all.
Said Dean: “Experts believe anyone who was denied a payment, received only partial refunds or has never claimed, can demand all their money back in a new compensation gold rush, regardless of whether the products – commonly sold in the 1990s and 2000s with loans, credit cards and mortgages – were ¬appropriate for them or not.
“This second wave of PPI payouts has come about because banks were not only mis-selling insurance ¬products to cover repayments in case of illness, disability or redundancy to people who would never be able to claim, but at the same time were taking secret eye-watering commissions of up to 95 per cent.”
Expensive legal teams
Solicitor Andrew Settle is one of the lawyers fighting the new claims through the courts.
He said: “The way the banks behaved originally in charging these extremely high secret commissions was bad enough, but the way they are now using their financial advantage to fund ¬expensive legal teams to try to defeat millions of new legitimate claims is another shocking development in the whole PPI scandal.
“This isn’t customers trying it on, this is customers who the courts have ruled have been unfairly taken advantage of.
Rather than doing what most would see as the right thing and paying back the money, they are pursuing every possible legal angle to try and defeat ¬legitimate claims.
“The banks know if they take the unusual step of hiring a ¬barrister to fight a claim in the Small Claims Courts, we have to hire a barrister as well to make it a fair fight.
“Even when the banks lose, in many cases, they are not accepting the decisions and are appealing those cases to a higher court.”
Martin Richardson, another lawyer believes claims would be better heard under the fast-track court system rather than in the Small Claims Court which would mean the loser would have to pay all of the winner’s costs.
He said: “In fast-track cases, the winning party can recover legal costs. This is not the case in the Small Claims Court where only a small amount of fixed costs can be recovered.”
Dean Denham also claims that when banks settle cases out of court they do so under a deal known as a Tomin Order which prevents a successful claimant revealing the amount of their payout.
He said: “This is to try to discourage further claims.
This issue has come to the attention of Tory MP Kevin Hollinrake, co-chairman of the All Party Parliamentary Group on Fair Business Banking. He agrees that, if banks won’t play fair, claims should be heard under the fast-track court system.”