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UK judge announces devastating ruling for PPI

While many banks and financial institutions had hoped to have seen the end of the Payment Protection Insurance (PPI) saga, a court ruling in South Shields yesterday has cast the industry into total and utter panic. Judge Jacqueline Smart ruled that a credit card holder, taking action against MBNA, was entitled to receive a rebate of her PPI payments because it appears as though MBNA failed to advise the customer that it was receiving a commission on every policy sold.

Even though there are ongoing issues regarding the sale of PPI, and whether hard sell tactics in the past have prompted many customers to acquire this insurance (which they may or may not require), yesterday's ruling could cost the industry billions of pounds. If the ruling is ratified, and credit card companies in the UK decide not to challenge the case, each and every PPI customer in the UK, who was not advised that their financial company was receiving a commission on the policy, may well be eligible for a full rebate.

However, as we have seen with the overdraft fees saga, the UK banking industry has a history of dragging out such situations for as long as possible to delay any potential compensation payments and make life as difficult as possible for those challenging their services.

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