If you took out a credit card, mortgage, or another form of lending before 2011, you could be due £1,000’s in compensation from your lender.
That’s because you could have been mis-sold Payment Protection Insurance (PPI), and law firm Harcus Parker is looking to file for compensation on behalf of millions of customers across the UK.
Some readers might remember the PPI scandal in the media – and the Arnold Schweinsteiger advert which encouraged people to submit their claims before the August 2019 deadline.
But this new legal challenge is different. This is centred around the secret commission your lender charged on these policies.
So, below we’ve explained how the PPI scandal came to light, and why you could still claim for compensation with Harcus Parker.
It’s worth checking to see if you could be owed money[/caption]
What was the PPI scandal?
PPI was a form of cover sold alongside mortgages, credit cards, loans and other types of lending. It was first sold in the UK in the 1970s, with most of these policies bought in the 1990s and 2000s.
In essence, PPI promised to cover your credit agreement in instances where you were made redundant or fell ill.
In return, like other forms of insurance, you’d need to pay a premium.
But it soon became clear that most of these policies were being widely mis-sold. PPI was profitable product for many lenders, and they often added to credit agreements without informing their customers.
In some cases, people who weren’t eligible for PPI were sold this cover too.
Eventually single-premium PPI policies were banned in 2009 and, after a high court case two years later, consumers were encouraged to file for compensation from their lenders.
Between 2011 and 2019, over £38 billion was paid out by banks across the country in compensation. This made it the UK’s costliest ever consumer finance scandal.
Why is this new claim different?
The Financial Conduct Authority (FCA) wanted to bring the saga to a close, and it set a deadline of August 2019 for people to claim compensation from their lender.
And that should have been that.
But Harcus Parker believes the banks are still withholding £18 billion worth of compensation from consumers due to the commission models used to sell PPI.
Since PPI was a low-cost, profitable product, some lenders were earning around 75% commission on these policies. And the law-firm believes this hasn’t been repaid to consumers.
“These new secret commission claims need to be taken through the courts. Financial institutions had hoped that would mean that individuals would not be able to bring the claims,” said a spokesperson at Harcus Parker.
What is the claim based on?
The legal challenge is centred around a ruling made in the Plevin vs Paragon Personal Finance case in 2014.
Susan Plevin argued that she had been unfairly treated and wasn’t informed of the near 72% commission being charged on her £5,780 PPI policy.
Plevin won the case and in 2018 the FCA said that if over half of your PPI bill went on commission then you’d be due a pay-out.
How is Harcus Parker going to file for compensation?
Harcus Parker is launching the first PPI group legal action to fight for this compensation.
This means thousands of people could earn their compensation at once instead of the courts reviewing each case individually.
To sign up to Harcus Parker’s campaign, fill out the form on their website here.
The first hearing for the group claim will take place next month and, if successful, Harcus Parker believes the average claimant will receive between £2,500 and £3,000 in compensation. In some extreme cases, lenders will need to repay £10,000.
The current group litigation is working under a “no win, no fee” principle. This means if the legal challenge fails, those who signed up don’t owe Harcus Parker any fees or charges. It’s only if the law-firm is successful in reclaiming your money will it earn a percentage of its value.
Currently, this sits at 35% plus VAT.
If you sign up to the challenge, but wish to back out later, then get in touch with the law firm directly.
Is everyone who was sold PPI entitled to a refund?
Not everyone will be entitled compensation through Harcus Parker’s new legal challenge. It says the following will be able to join its claim are:
- Anyone who had PPI but didn’t previously make a claim
- Anyone were told they missed the deadline and were too late to claim.
- Anyone who previously had a PPI claim rejected
- Anyone who successfully made a claim before the August 2019 but was not fully compensated.
How to check if I’m eligible
If you’re unsure if you meet this criteria, then fill out the form on Harcus Parker’s website for free. It takes 60 seconds to complete if you have all the right documents and information at hand.
This includes your personal details, such as your name and contact details, and information on your credit agreement. A credit statement or balance should suffice, but if you don’t have these documents at hand you can still fill out the form.
Harcus Parker will then contact your lender on your behalf to recover this information, and that might take time depending on how quickly they respond to the enquiry.
