Barclays wins first round in £1.1bn legal battle with credit card firm CCUK
Barclays has won the first stage in a legal battle with a US-based credit card company which is suing it for £1.1bn.
The High Court today rejected an application for summary judgement against Barclays brought by CCUK, the British arm of Nasdaq-listed Atlanticus Holdings, in a complex case revolving around a PPI-style misselling saga.
CCUK, formerly known as Compucredit, had asked the court to force Barclays to restart compensation payments, which the British bank halted last year.
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Barclays sold CCUK a book of 500,000 credit cards under the Monument brand in 2007, but it later emerged some Monument customers had been missold payment break products, which allow customers to defer payments if their circumstances change.
Barclays has paid the resulting compensation claims for most of the past decade under the terms of the 2007 deal, but stopped last year, claiming that CCUK had not been stringent enough in testing if customers had actually been missold the product.
CCUK last year sued it to try to wind back its original purchase. To add a further twist, Barclays then countersued, claiming CCUK overpaid compensation.
The case will now continue on to a full trial, which is unlikely to be heard in full until next year.
CCUK claims it will be unable to afford continued compensation payments, raising the prospect of it going bust and leaving customers out of pocket. However, in today’s judgement Mr Justice Popplewell said the claimants had provided no financial evidence to support this.
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Prominent MPs, including Liberal Democrat leader Vince Cable and Labour Treasury Select Committee member John Mann, have previously expressed concerns about whether the compensation still owed to many customers will be honoured.
A spokesperson for CCUK said the firm remains “confident of victory” ahead of a full trial. “Barclays has nothing to celebrate today, since it is now on a collision course with its own customers.”
“Today’s result is bad news for 100,000 or more Monument card holders who either have not been paid, or have only partially been paid the compensation they are owed.”
A Barclays spokesperson said: “We welcome the court’s decision on CCUK’s application. Our priority remains for customers who were mis-sold PBP to be compensated.”
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