Britons to receive payout over credit card insurance mis-selling scandal
Thursday, 29 August 2013
Millions of Brits are said to be in line for payouts as banks are hit yet again by another mis-selling scandal, this time relating to credit card and identity theft insurance sold with their credit card products.
The total amount of payouts is estimated to be 1.3bn and the process of paying the 7m customers who bought the policies back will begin after the August bank holiday, where customers will start to receive letters advising them on how they go about getting their compensation.
Those customers who are affected come primarily from Barclays, Santander, HSBC, Nationwide and MBNA, all of which were caught up in the practice of selling insurance coverage against services they already offered to their customers for free, selling them policies they simply didn’t need.
This latest scandal comes off the back of a crackdown by the Financial Conduct Authority (FCA) on the insurer CPP, who sold 4.4 million policies to banks from January 2005 to March 2011.
The regulatory body found that many people were mis-sold the policies whilst reporting their credit, debit or prepaid cards lost or stolen, purchasing cover against up to 100,000 against unauthorised purchases made on the missing cards. CPP, the insurer behind the policies, were fined 10.5 million for their part in the practice, and together with the banks found at fault will be responsible for funding the refunds that will be made to affected customers.