Landmark legal battle on credit card insurance won by South Shields mother

Oct 1 2009 by Katy Simpson, The Journal

A LANDMARK legal battle won by a mother from the North East could have opened the floodgates for millions of people to take credit card companies to court.

Lynne Thorius of South Shields is the first person to see her credit card debt wiped out in court because she was "unfairly" sold payment protection insurance (PPI).

All previous attempts to sue credit card companies over insurance policies have been settled out of court. Consequently, so a ruling has never been made on the issue previously.

But because Mrs Thorius, 49, was the one being sued, rather than the credit card company, the case went all the way to a judgement.

MBNA was trying to sue her for the outstanding £8,000 balance on her Sunderland AFC-branded credit card.

Deputy District Judge Jacqueline Smart ruled at Newcastle’s County Court that MBNA had breached the Unfair Relationships Act, because the credit card provider earned commission from the insurance company for the policy it had sold to Mrs Thorious, without telling her. Judge Smart threw out MBNA’s case, and wiped Mrs Thorius’s debt.

The mum-of-three had paid thousands of pounds for the protection scheme over seven years, although she had never asked for the coverage it provided.

Credit card industry insiders estimate that around 40 million PPI policies have been sold to British consumers by various companies in the last six years alone.

MBNA yesterday insisted this case did not set a legal precedent.

But Carl Wright, chief executive of claims management company Cartel Client Review, who successfully defended Mrs Thorius, disagreed.

He said: "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.