A LANDMARK legal victory may have opened the floodgates for millions of people to take credit card companies to Court.

Lynne Thorius is the first person to see her credit card debt of £8,000 wiped out in court because she was unfairly sold payment protection insurance (PPI).

MBNA was trying to sue the South Shields mother-of-three for the outstanding balance on her Sunderland AFC branded credit card.

The cleaning supervisor, 49, had paid thousands of pounds for the protection scheme over seven years despite never having asked for the coverage it provided.

But a judge ruled MBNA had breached the Unfair Relationships Act, because the credit card provider earned commission from the insurance company for the policy it had sold, without telling Mrs Thorius.

All previous attempts to sue credit card companies over insurance policies have been settled out of court.

Because Mrs Thorius was the one being sued rather than the credit card company, the case went all the way to a judgement.

MBNA insisted the case did not set a legal precedent.

Carl Wright, chief executive of claims management company Cartel Client Review, who successfully defended Mrs Thorius, disagreed.

He said: ''This is the first time that a judge has ruled on this point.

''MBNA acted in a disgusting manner. They harassed this woman at all hours of the day and night to force her to pay for something she never even asked for.

''She clearly ticked the 'no thank-you' box, but MBNA applied PPI on her account anyway.

''Now Lynne has won, the floodgates could open for millions of other people.

''It will change the way banks lend money and issue credit cards.''

Mrs Thorius said: ''It's a massive relief for myself and my family.

''MBNA treated me appallingly from start to finish. I ticked no on the PPI option but they applied it to my account anyway.

''When I had my hours cut at work from full-time to part-time and started to struggle to pay the bill, MBNA started calling me three or four times a day, even as late as 9.30pm or 10pm.

''MBNA were rude on the phone and one person told me to get another job, while someone else said they would repossess my house.''

Mrs Thorius was first issued with a card in July 2002 with a limit of £1,500. She used it to pay bills and buy gifts for family and friends - but before she knew it she was close to the card limit, which was gradually increased to a whopping £7,000.

She said: ''I didn't particularly want a credit card and I certainly didn't want PPI. That alone was costing me a fair few pounds a month.

''When I noticed it on the statement, I rang them and told them I didn't want it. They said I wouldn't have got the card if I didn't tick the 'yes' box.

''When I tried to explain that I hadn't, they just wouldn't listen.''

Mrs Thorius, who was paying £20-£30 a month in PPI for seven years, even tried to make a PPI claim when her hours were cut but MBNA turned her down flat.

With her debt soaring and with seemingly no way out, she contacted Manchester-based Cartel last December.

Initially Cartel contacted MBNA with a Data Protection Act Subject Access Request to ask all documentation relating to her file.

On discovering Mrs Thorius - who was earning £10,000 a year at the time - was set to challenge her agreement MBNA launched separate action to sue her for arrears totalling £8,686.90.

The case was heard over nine hours by Deputy District Judge Jacqueline Smart at Newcastle County Court last week.

An MBNA spokesman said: ''This case was brought by one of MBNA's agents.

''The judgement went against MBNA for a number of reasons, in principle because the deputy district judge felt that MBNA had not on this occasion provided the appropriate documents to the customer and as such was not able to rely on the clauses MBNA would ordinarily seek to rely on in these cases.

''The case is a county court case and each case is decided on its own merits and on the factual circumstance of each case.

''This does not set any legal precedent.''

A spokesman for the Financial Ombudsman Service said: ''Only a court can decide if a credit agreement is unenforceable, the ombudsman service decides cases by determining what is fair and reasonable in the individual circumstances of the case. If a consumer is solely complaining that a credit agreement is legally unenforceable - on the basis that the agreement has been inaccurately completed or lost - they may want to refer that matter to the court.

''However, where there is oppressive or misleading behaviour by a lender that results in a consumer borrowing money the ombudsman service may well uphold the consumer's complaint. The ombudsman service is also currently receiving around 750 cases a week about payment protection insurance and upholding around 90 per cent of these.''