A couple who were mis-sold payment protection insurance (PPI) by a pushy double-glazing salesman have been awarded their money back with interest by the Court of Appeal.
The couple had borrowed more than £8,500 to pay for new windows and doors in their home. More than £1,300 of that total was in respect of PPI which had been sold to them on the misleading basis that no loan would be forthcoming unless they signed up to the policy, which they neither wanted nor needed.
The loan was advanced by a finance company which had no sales force of its own and operated entirely through brokers. Both the double glazing firm and the brokers who arranged the finance had since ceased trading, leaving the finance company as the only potential target for litigation.
The couple’s claim against the finance company was upheld by a judge who ruled that the relationship between them had been ‘unfair’ within the meaning of Section 140A of the Consumer Credit Act 1974. The finance company was ordered to vary the terms of the loan and to pay the couple £2,165, that being the amount of the insurance premium plus interest.
In appealing against that decision, the finance company argued that it was ‘entirely blameless’ and had not acted culpably in any of its dealings with the couple. It had in no way authorised the mis-selling and had not itself provided the PPI policy, only the means by which the premium was paid.
However, in dismissing the challenge, the Court ruled that, as a result of the interplay between Section 11(1)(b), Section 12 and Section 56(2) of the Act, the double glazing firm was deemed to have acted as the finance company’s agent. The couple would not have purchased PPI but for the salesman’s misrepresentation and the finance company had received commission on the sale of the policy and interest on that part of the loan which related to it.