MARTIN Lewis has issued a warning to millions of people who could still be owed £1,000s over “outrageous” PPI sales.
A new legal claim has been launched that has already gathered around 350,000 people that could cost banks up to £18billion.
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The “no win, no fee” legal claim is being led by legal firm Harcus Parker and is the biggest of its kind.
It accuses banks of secretly charging a huge 80% commission on personal protection insurance (PPI) sales, and not refunding the money in their previous compensation claims.
Barclays, HSBC, RBS, Lloyds, MBNA, Santander, Tesco Bank, The Co-op John Lewis, Nationwide and Yorkshire Building Society have all been named in the class action lawsuit.
The claim has already gathered 350,00O people and the average payout for individuals joining the suit will be around £2,500.
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Speaking on a recent episode of his podcast, Martin Lewis described PPI miselling as “The UKs single biggest financial scandal in living memory.”
He explains how he first got involved in campaning for the repayment of missold PPI in 2005/6 and helped to get people over £10billion of their money back, without taking any commission.
He added: “Generally I am against having to use claim handling firms, but I think it may be too complicated for people to be able to do themselves.
“I cannot tell you that joining this suit is 100% risk free although I think it is a pretty reasonable risk for you to take.
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“People who are interested should go and have a look at the law firms wesbsite.”
The original deadline for customers to make compensation claims against being missold PPI passed in 2019.
However, the new legal claim, led by Harcus Parker, is open to those who had a PPI claim rejected, or those who were only paid back the chunk of commission that was above a 50% premium.
The new class action is specifically about high levels of secret commission claims that are sometimes known as “Plevin claims”.
This is following a case in 2016 when Susan Plevin took her lender, Paragon Personal Finance to court after she found that 72% of the £5,780 premium she had paid for her PPI policy was commission.
Damon Parker, senior partner at Harcus Parker, said: “This group action is intended to force financial institutions which profited from PPI to pay back money that they should have never taken in the first place.
“The banks and credit card companies have known for years that they should pay this PPI secret commission money and have been using every trick in the book to avoid paying.”
Around 50million PPI policies were sold and since the clampdown by courts and and regulators banks have been forced to pay around £36billion back.
What is Payment Protection Insurance?
PPI was an insurance policy that was attached to credit agreements such as loans, mortgages or credit cards.
The idea behind these payments was to cover payments if a policyholder fell ill, had an accident or lost their job and was unable to pay.
Consumer groups started raising questions about PPI and a series of investigations revealed lots of people had been sold policies without even realising they had.
Staff at the time had been incentivised to sell PPI and this resulted in customers being mis-sold.
In lots of cases repayments were just quoted including PPI without giving the customer a choice, or explaining it to them.
Some were sold insurance they would never be able to claim on.
Sales of single-premium PPI policies were banned in 2009.
What are class action lawsuits?
Class action lawsuits are lawsuits that result in compensation for many people.
It means that courts can treat similar claims as one rather than having hundreds or perhaps even thousands of seperate individual claims.
The process can be lenghty and could take up to 18 months in some cases and there is no guaranteed payout.
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There is no cost to sign up to a lawsuit of this nature, but the firm will usually take a cut of the payout if the claim is sucessful and that can be as much as 30%.
Here we explain what a Plevin claim is and how you could still be owed money from mis-sold PPI.
