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Judge Quashes Woman's £8,000 Credit Card Debt In 'landmark Ruling' On Mis-selling Of Payment Protection Insurance

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http://www.dailymail.co.uk/news/article-12...-insurance.html

A woman has won a landmark legal victory after a judge wrote off her £8,000 credit card debt because she had wrongly been sold payment protection insurance (PPI).

A county court judge ruled that Lynne Thorius, 49, from South Shields, was charged thousands of pounds by MBNA for an insurance policy she had never asked for.

The ruling could open the floodgates for millions of pounds worth of similar claims against banks and building societies.

It is estimated that around 40 million PPI policies have been sold in Britain in the last six years alone, making this the second biggest selling insurance product on the market.

Carl Wright, of claims management company Cartel Client Review, who successfully defended Lynne, said today that the ruling is a legal first.

'This is the first time that a judge has ruled on this point and will have a massive impact,' he said.

'Consumers now have the authority of the court to bring a claim in such a way that banks and credit card companies will be unable to defend it.

'MBNA acted in a disgusting manner. They harassed this woman at all hours of the day and night to force her to pay for something she never even asked for.

'Now Lynne has won, the floodgates could open for millions of other people. This is a massive victory.

'It will change the way banks lend money and issue credit cards. We went to court because we knew we had a strong case.

'But MBNA thought their case was watertight. When we got to court our legal argument absolutely white-washed them, and their case against Lynne was thrown out.'

'This is a landmark decision for all Cartel clients and a demonstration of the strengths of legal argument used by Cartel.'

The mother-of-three applied for the card - which was branded Sunderland ASC but financed by MBNA - in July 2002.

She ticked the box which said 'no thank you' to payment protection insurance on the application form, but despite this, the policy was initiated with a £20-a-month charge.

The card had a limit of £1,500 and Mrs Thorius, a cleaning supervisor, used it 'here and there' to pay bills and buy gifts.

But the credit limit was gradually extended and before she knew it, Lynne was nearly £7,000 in debt.

She said: 'I didn't particularly want a credit card and I certainly didn't want PPI. That alone was costing me a fair few pounds a month.

'When I noticed it on the statement, I rang them and told them I didn't want it. They said I wouldn't have got the card if I didn't tick the 'yes' box.

'When I tried to explain that I hadn't, they just wouldn't listen.'

Mrs Thorius, whose PPI charge was gradually increased to £30, even tried to make a claim on the policy when her work hours were cut, but MBNA turned her down.

With her debt soaring and with seemingly no way out, Mrs Thorius contacted the claims management company in December 2008, while MBNA launched a separate action against her, suing for arrears totalling £8,686.90.

The bank even threatened a charging order to repossess her house, even though her debt was unsecured.

In a nine-hour hearing at Newcastle-upon-Tyne County Court, Deputy District Judge Jacqueline Smart ruled that the PPI policy had been unfairly imposed.

She also threw out MBNA's case against Mrs Thorius because they earned commission on the PPI they 'sold' her.

It is the first time a judge has ruled such an arrangement to be in breech of the Unfair Relationships and Unfair Consumer Credit Act Section 78, according to Cartel.

If the courts back this decision there's going to be carnage for the banks, as I suspect that they have never calculated the courts saying that the debt is unenforceable.

Looks like the debt timebomb could have an interesting twist.

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I read a piece the other day about how the kansas supreme court had ruled the agency acting as a proxy for the MBS bondholders was not legaly entitled to enforce repossessions- the problem being that neither was anyone else involved- so if this stands about half the mortgages in the US will be immune from forclosure.

It looks like the legal wheels are coming off all round :lol:

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Hang on a bit. I get the PPI mis-selling and she should be relieved of any accrued premium liabilty. But why should her other credit card debt of £7,000 be waived. Surely her responsibility to pay that back is the same as anyone elses. Sound like more moral hazard for debtors IMO.

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Hang on a bit. I get the PPI mis-selling and she should be relieved of any accrued premium liabilty. But why should her other credit card debt of £7,000 be waived. Surely her responsibility to pay that back is the same as anyone elses. Sound like more moral hazard for debtors IMO.

If she could show that the repayments she missed (and hence the charges) were due to the extra payments needed towards the missold insurance, then she wouldn't owe them either.

Say she owed £100 - £80 CC and £20 insurance (lumped together)

She can show she had £88 at that time -and could have paid the CC part. She didn;t make the full £100 tho, and therefore started wracking up charge after charge after charge + interest.

Well, if the £20 wasn't owing, neither were the charges that follow from owing it.

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If she could show that the repayments she missed (and hence the charges) were due to the extra payments needed towards the missold insurance, then she wouldn't owe them either.

Say she owed £100 - £80 CC and £20 insurance (lumped together)

She can show she had £88 at that time -and could have paid the CC part. She didn;t make the full £100 tho, and therefore started wracking up charge after charge after charge + interest.

Well, if the £20 wasn't owing, neither were the charges that follow from owing it.

I know where you are going with this legalese, but the point is she shouldn't be let off the basic liability for any card purchases.

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I know where you are going with this legalese, but the point is she shouldn't be let off the basic liability for any card purchases.

Quite right.

She shoud be let off because the credit card company never had any money at all and is run by fraudsters.

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Oh I love it when bankers get shafted.. ofcourse she could have just told them to feck off in the first place ignored all correspondance, not signed aything that came through the door and get the same result....albeit with a crap credit record.

waver: don't do what I say just cos it worked for me..it may not work for you!

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Oh I love it when bankers get shafted.. ofcourse she could have just told them to feck off in the first place ignored all correspondance, not signed aything that came through the door and get the same result....albeit with a crap credit record.

waver: don't do what I say just cos it worked for me..it may not work for you!

Didnt you get collectors at your door?

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Nope! deny everything, Admit nothing, sign nothing, silence is golden!

Again this worked for me, may not for you!

Why do you think whenever you see films about police using dubious methods to get an admittance and signature! cos without it they have zip!

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The bank even threatened a charging order to repossess her house, even though her debt was unsecured.

I thought that even unsecured debts could still result in a petition for bankrupcy by the credit card company. And in that situation the house would have to be sold?

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