New £18 billion group legal claim accuses banks and credit card companies of secretly charging up to 95% commission on PPI
MPs have written to high street banks warning them not to ‘frustrate and stifle’ legitimate legal cases that are being pursued as part of a new wave of Payment Protection Insurance (PPI) claims.
It has emerged that for more than a decade banks and credit card companies secretly charged their customers commissions of up to 95%. To date, a PPI claimant wishing to recoup this money has had to make a Data Subject Access Request (DSAR) to find out how much undisclosed commission was levied as a first step towards bringing a claim.
These requests have often taken months, even years, to answer as banks have been accused of deliberately sitting on a huge backlog of DSARs to stop customers from claiming back the secret PPI commissions that should never have been levied.
A letter to banks from MPs on the All Party Parliamentary Group (APPG) on Fair Business Banking has said such delays could be in breach of data protection laws and raised concerns that this could be impeding legitimate claims.
William Wragg MP, co-chair of the APPG on Fair Business Banking, said:
‘If it turns out that banks are acting as a block to the proper legal process it would be a concern to us all. Any backlog of data subject access requests needs to be dealt with efficiently and effectively by the banks.’
Alex Neill, co-founder of Consumer Voice, said: ‘This appears to be yet another damning chapter in the PPI scandal. The banks have sought to delay and deny access to justice to the customers they ripped off for far too long’.
New PPI legal claim accuses banks of deliberate delay tactics
The warning from MPs comes after a leading litigation law firm Harcus Parker last month launched a new group legal claim that aims to help millions of PPI customers recoup the huge commissions that have been secretly charged by banks and credit card companies.
Banks have blamed Covid and staffing issues brought on by lockdowns for delays in processing PPI claims. The letter from the APPG stated: ’We are told that there is now a backlog of thousands, even tens of thousands, of DSARs relating to PPI claims which have not been returned by the major banks. While some of this may be explained by legacy issues relating to Covid, there are real concerns that some banks may be deliberately delaying their responses to frustrate and stifle claims.’
Damon Parker, senior partner at Harcus Parker, says delays could be a deliberate ploy: ’Banks are playing every trick in the book when it comes to defending these claims. Delays in responding to DSARs is just one chapter. The other issue we see all the time is loading huge costs onto what are relatively modest claims when pursued individually. This is just one of the reasons why a group legal claim is so necessary. There is real power in numbers.’
Harcus Parker is asking the court to make the DSAR process much simpler and to order the banks to hand over the information within one month.
A new era for the PPI scandal
PPI policies have often been sold alongside mortgages, loans and credit cards to help repay people’s borrowings if their income falls because they become ill or lose their jobs.
PPI selling reached a peak between 1990 and 2010 when complaints about the mis-selling of expensive, inappropriate, ineffective and inefficient policies began to emerge.
A court ruling in 2011 opened the floodgates for consumers to claim compensation on PPI policies dating back years.
The Financial Conduct Authority set a deadline of 29 August 2019 for making PPI compensation claims. The total amount claimed by that point cost UK banks £38.3 billion. However, while the first wave of PPI claims were concerned with inappropriate products being sold to customers, these new claims relate to the eye-wateringly high secret commissions.
Legal judgements have ruled that customers can claim 100% of the PPI cost back because the level of commissions were so unfair. It is estimated that such claims could cost banks a further £18 billion in compensation.
Am I eligible to claim £1,000s from PPI?
To join the Harcus Parker group claim you will have had a mortgage, loan or credit card with any lender in the UK in the past and one of these criteria will apply to you:
- You never made a PPI claim
- You don’t know whether you had PPI or not
- You made a PPI claim but this was rejected
- You made a claim but were only only paid back partial compensation having not been told about high levels of commission.
You can check your eligibility criteria by visiting the Harcus Parker claims website. Neill says: ‘This group action should mean the banks cannot continue to avoid their fate and customers will be able to hold them to account. Banks must pay back what they owe without further delay or excessive costs.’
Over half a million pension holders and beneficiaries could be eligible to join a new Capita data breach legal claim. Join this claim if were affected.
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