Landmark Case Could See More Consumers Wipe Off Unfair Debt
A landmark case, involving a credit card and payment protection insurance could have massive ramifications for thousands of U.K consumers looking to write off unfair debts.
The recent case at South Shields Magistrates court saw Judge Jacqueline Smart rule in favour of Mrs Lynne Thorius, in a case against MBNA.
The credit giants had tried to force the defendant to repay £8000 of unpaid debt on a Sunderland F.C branded credit card. However, the judge ruled that this was unlawful, due to MBNA’s failure to disclose information regarding payment protection insurance, which was taken out with the card.
Defending Barrister Paul Grant successfully argued that MBNA had broken the terms of the consumer credit act, which resulted in the credit card debt being written off. In addition, Judge Smart ordered MBNA to repay Mrs Thorius' PPI premiums with interest. This figure amounted to £2500.
The case for the defence was based on the fact that the payment protection policy included a clause which stated that MBNA would receive regular commission payments from insurance provider ITT London & Edinburgh. This was not made clear to Mrs Thorius, as she was not provided with any documentation with the policy at the point of sale.
In addition, MBNA could not provide a copy of the original credit agreement, which is a requirement of the Consumer Credit Act.
This case could potentially affect thousands of consumers across England and Wales, who will now be looking at the legality of their credit agreements and payment protection insurance policies.
The ruling could undermine thousands of other agreements, where PPI has been sold at the same point of sale as loans, credit cards or hire purchase agreements. This practice has now been banned by the Competition Commission.
Credit Clear U.K Managing Director Lee Lummis commented:
"This is excellent news for the thousands of consumers who have been unfairly treated by lenders. Credit Clear UK has many clients in exactly the same scenario and we are expecting redress."
If you believe that you may have been affected by a mis-sold PPI policy, contact us today on 0800 038 2233 to see if you are eligible to make a claim.
