The borrowers entered into a loan agreement with a bank, repayable over 62 months and agreed to take out a PPI Policy. There was a dispute as to whether the bank employee selling the loan had explained what PPI was and why it was needed. The borrower defaulted on the loan and the bank sought judgment on its claim for payment of the outstanding monies due on the loan, including PPI sums. The court gave judgment for the bank, finding that it had not required the borrowers to take out PPI as a condition of granting the loan. The bank employee went through the relevant documentation with the borrowers, including a questionnaire and no misrepresentation had arisen because the bank had never represented that PPI was mandatory. On that basis the loan agreement was enforceable and there had been no breach of ICOB. The borrowers had alleged an unfair relationship, but on the basis of the findings, the court held that the issue of whether there was an unfair relationship did not arise.

Black Horse v Speak

District Registry (Manchester)

HHJ Waksman QC

21 July 2010