Court quashes £8,000 credit card debt following mis-sold PPI

After a nine-hour hearing at Newcastle-upon-Tyne County Court on September 21, Deputy District Judge Jacqueline Smart ruled that the PPI policy had been unfairly imposed. She also threw out the rest of MBNA's case against Ms Thorius.

Ms Thorius said: "MBNA treated me appallingly from start to finish. I ticked no on the PPI option but they applied it to my account anyway."

Carl Wright of Cartel Client Review said the ruling was a legal first. "This is the first time that a judge has ruled on this point and it 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.

"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.

Earlier this week the Financial Services Authority ordered 185,000 rejected complaints of PPI mis-selling to be reopened.

Jon Pain, the FSA's managing director of retail markets, said: "Consumers should not be pressured or deceived into buying PPI and they are entitled to have a policy properly explained to them.

"It is unacceptable that despite previous warnings about pool sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this."

A spokesman for MBNA said: "Cases in the County Court are not precedent-setting. Any such cases are decided on their individual merits and no two cases are the same."