A woman 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).
The woman's £8,000 credit card debt was quashed after MBNA charged thousands for an insurance policy she never asked for.
The ruling could open the floodgates for millions of pounds worth of similar claims against banks and building societies.
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.
With her debt soaring and with seemingly no way out, the woman contacted a 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.
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.
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.
The woman said: "It was an incredible victory for us, and one we are immensely proud of."
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