Britons might be able to reclaim “thousands” in PPI even if they received payments for it before.
In Martin Lewis’s Money Saving Expert email this week, the group prompted readers: “If you had a loan, credit card, car finance, catalogue debt etc, there’s new collective legal action you can join to get you back what you paid in PPI if, as was common, the commission was too high (even if you already had some of it back).”
While the initial round of Payment Protection Insurance (PPI) claims in previous years centred on mis-selling, the new action alleges banks and credit card companies “secretly” pocketed huge commissions of up to 95 percent from customers who signed up for the insurance product.
PPI secret commission claims are sometimes known as Plevin claims after Susan Plevin took her lender to court after discovering that 72 percent of the £5,780 premium she had paid for her PPI policy was a commission.
The Supreme Court ruled in 2014 that a lender’s failure to disclose a large commission when PPI was sold can be defined as unfair under the Consumer Credit Act.
The group legal claim was launched in August 2023 by law firm Harcus Parker, which said around 350,000 people had already applied to join the ‘no win, no fee’ group legal action. However, it estimates millions more could be eligible to claim their money back.
On Wednesday, October 4, a Supreme Court ruling (Smith and Burrell vs Royal Bank of Scotland) opened the door to claims dating back beyond the usual six-year limitation period, provided that claimants can show an ongoing relationship with their bank.
Damon Parker, senior partner at Harcus Parker, said: “This Supreme Court judgment could not be more timely. Bank and credit card customers are still owed billions of pounds after they were secretly charged up to 95 percent commission when they took out PPI.
“The judgment ensures that millions more people can make PPI claims and recoup sums that should never have been charged by banks.
“Anyone who had PPI was charged outrageous commissions, and anyone with PPI who has not already been fully compensated is financially disadvantaged, having been made to pay the commissions and denied compensation – often for over a decade.”
Mr Parker added: “This case is symptomatic of the banks trying to use their financial might to try to block claims in the courts.”
According to Mr Parker, Banks and credit card companies have known since at least 2017 that they should pay back undisclosed commissions.
Banks have paid out an estimated £38billion in PPI claims over the last 20 years. This new group legal claim, which is based on breaches of the Consumer Credit Act, is estimated to be worth up to £18billion.
Mr Parker said: “Our group legal claim will be open to customers who have previously claimed but were refused compensation, those who did not recoup all of their losses, and customers who have never made a claim.
“Because these claims are about secret commissions, potential claimants will not know they are affected unless they check.
“We would urge anyone who thinks they may have a claim (essentially, anyone who had a credit card in the past) to fill out the very simple form on our claims website so that we can check if they are eligible.”
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.
