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PPI group legal claim launched over excessive commissions – are you owed £1,000s?

A new group legal claim hoping to claw back an estimated £18 billion in payment protection insurance (PPI) premiums on behalf of millions of consumers has been launched. 

Law firm Harcus Parker lodged a legal claim at Birmingham County Court on 29 September, arguing that some banks and credit card providers unfairly charged £18 billion in secret commission from customers who took out PPI.

In some cases, it's believed lenders charged up to 80% commission on PPI sales, and Harcus Parker says this should be repaid to consumers in full. It estimates that around six million people are still out of pocket and those affected could be due £1,000s each in compensation, though it's very early days and the case still needs to get the go-ahead to proceed.

Below is a quick summary of what we know so far – for full info, including the pros and cons of joining the claim, see our PPI legal action guide.

I thought the PPI reclaim deadline had passed. What's changed?

For decades, an insurance policy called payment protection insurance – commonly referred to as PPI – was sold to customers who took out loans, credit cards, store cards, catalogue accounts, overdrafts and car finance. Around 65 million policies were taken out – mostly between 1990 and 2011 – though the product was widely mis-sold.

Between 2011 and 2019, banks repaid customers more than £38 billion in compensation for mis-sold PPI. MoneySavingExpert.com and its founder Martin Lewis were at the heart of the campaign to encourage people to reclaim ahead of the deadline to do so on 29 August 2019.

Most people can no longer reclaim mis-sold PPI unless they're willing to go through legal channels or the small claims court, though those who successfully reclaimed while it was still possible can claim £100s in tax deducted from those payouts.

Harcus Parker isn't using the mis-selling argument in its legal claim. Instead, it's focusing on the high commissions on PPI sales, which it says consumers didn't know about when they took out the product – this is known as the 'Plevin' argument, named after the legal case on which it is based. 

Who's eligible to join Harcus Parker's group claim

So far, around 350,000 people have enquired with Harcus Parker as to whether they can join the claim. It's encouraging those who fit the following criteria to get in touch:

  • You live in England, Scotland or Wales. Harcus Parker isn't currently accepting sign-ups from Northern Ireland, where group legal claims work differently. We're checking if any firms are pursuing a similar claim in Northern Ireland and will update this when we know more.

  • In the past you've had a loan, credit card, store card, catalogue account, overdraft or car finance. For now, Harcus Parker's group legal claim is specifically against Barclays, Bank of Scotland, Black Horse, HSBC, Lloyds, MBNA, Santander and Santander Cards, but it says you don't need to have been a customer of these lenders to join – you could have a claim against any lender.

    AND...
  • You've never made a PPI claim before. This includes if you don't know whether you had PPI or not. If you're unsure, Harcus Parker can check for you. OR...

  • You have made a previous PPI claim but it was rejected. For example, you claimed you were mis-sold your PPI but were turned down. OR...

  • You've previously accepted a 'tipping point' offer. In other words, you were offered (and accepted) partial compensation on the basis of having not been told about high levels of commission.

For now, there is no deadline on when you need to join the claim by. For more information on how to join the claim, visit the Harcus Parker website. If you'd like to check whether you have a potential claim, you'll need to fill in a short form, including some personal details, such as your name, date of birth, email address and address.

Claimants could get back £1,000s each – though there's no guarantee

Harcus Parker estimates that claimants, if successful, could be due around £2,500 to £3,000 on average – though some claims could result in much higher payouts. 

If you don't sign up to the claim, you won't be entitled to a payout – even if you meet the eligibility criteria. 

However, at this stage there is no guarantee the group legal claim will actually be allowed to proceed. This first has to be decided by a senior judge.

If the application is successful, the total duration of the legal claim is also likely to take months, possibly years.

It's free to join – but legal fees will be deducted from any eventual payout

Harcus Parker says you won't have to pay anything upfront to join the lawsuit. If it wins, any payout you get will be minus the firm's 35% fee, plus 20% VAT on top. If lenders agree to settle before the case is decided in court, your payout will be minus a 20% fee, plus 20% VAT. The case is being made on a 'no win, no fee' basis, so even if Harcus Parker loses you shouldn't end up owing the law firm.   

Harcus Parker adds that it will be fully insured in the event it loses the case and potentially becomes liable for lenders' legal costs. For instance, if the court decides to allow the group claim to proceed, Harcus Parker says it will take out additional insurance to cover this eventuality. The only situation in which claimants could be left liable is if that insurance were to fail.

As joining the case is not without some risk, you should carefully weigh up the potential pros and cons outlined above before signing up.

UK Finance, on behalf of lenders said: "Firms will review and respond to any claims made in legal proceedings as required." 

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