CPP card protection and ID insurance mis-selling compensation deal announced
Details of a compensation scheme for people mis-sold insurance products by CPP Group have been unveiled by the regulator.
Banks could have to pay out a staggering £1.3 billion to compensate victims of another mis-selling scandal – this time involving card protection and identity theft insurance.
The products were mis-sold by Card Protection Plan (CPP) Group, which is also putting money into the compensation fund.
What happened then
Between January 2005 and March 2011, CPP sold 4.4 million policies which raked in £354 million. And a further 18.7 million policies were renewed to the tune of £656 million.
Customers were put through to CPP when they called a number to activate their debit or credit card. The company then attempted to sell card protection, at £30 a year, despite the fact the cards were already covered by the banks.
They also sold the identity theft insurance, at £80 a year, but regulator the Financial Conduct Authority (FCA) has ruled that CPP “greatly exaggerated” the risks of ID fraud during the sales process.
The following banks and card issuers have voluntarily signed up to provide the compensation as they introduced customers to CPP:
- Bank of Scotland Plc
- Barclays Bank Plc
- Canada Square Operations Limited (formerly Egg Banking Plc)
- Capital One (Europe) Plc
- Clydesdale Bank Plc
- Home Retail Group Insurance Services Limited (which owns brands including Argos)
- HSBC Bank Plc
- MBNA Limited
- Morgan Stanley Bank International Limited
- Nationwide Building Society
- Santander UK Plc
- Royal Bank of Scotland Plc
- Tesco Personal Finance Plc
And the insurance products were known by a number of names, depending on who was selling them. Here’s a full list of those names:
- Card Guard (offered by HSBC)
- Card Safe (offered by M&S Money)
- Barclaycard Card Protection
- Barclays Cardholder Protection
- NatWest Card Protection
- Egg Emergency Cover
- Card Protection, Card Protection Plus and Commercial Card Protection (which were sold by CPP and a number of its business partners)
What happens now
However, before compensation claims can be made, the scheme must first be voted on by CPP customers, with a majority agreeing to the compensation, and then approved by the High Court.
Seven million people will receive letters from CPP from next Thursday 29th August asking them to vote on the compensation package.
If the scheme is approved, compensation will be payable to anyone mis-sold these products since 14th January 2005 from next spring.
The compensation will be any money paid for the insurance products, plus 8% interest on the amount owed.
If you want to claim compensation, you’ll be sent a form to fill in. You don’t need to go through a fee-charging claims management company and they’ll be no extra benefit in doing so.
CPP was fined £10.5 million by the FCA’s predecessor the Financial Services Authority in November last year for the mis-selling.
This, and compensation payouts for policies it mis-sold directly, pushed to the company to the brink of going under. However, a new refinancing deal has allowed it to continue trading and means this compensation scheme can progress.
More on consumer rights and redress
How to claim your PPI compensation
The new Consumer Rights Bill: what you need to know
How to complain to the Financial Ombudsman Service
Comments
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@Luniversal Not from this planet, are you? That one or two percent of politicians were on the fiddle really isn't any justification for condemning the lot of them. If you want some other political system you are free to leave the country. Operative word there is 'free'. Next time anyone reading this gets a package they ordered on Ebay from China or any other non-EU country, marked as a 'gift' on the customs form, just realise that you are party to a multi-billion pound fraud, in comparison to which a few parliamentary expenses are loose change. Small print which is deliberately aimed to mislead is clearly immoral and subject to challenge. Recurring payments are a scam whether in the small print or not. If you've paid out on something where there was no risk to the insurer eg. a cancelled card,, ask for all your money back or use Small Claims.
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What really sucks about CPP - my son received a bill from CPP on a credit card that he had cancelled several years before, but apparently there was a recurring charge. When he phoned to cancel the policy he was told "It's too late." He finally managed to cancel it at the subsequent renewal, but then he phoned promptly to cancel & threatened legal action against CPP & Santander, who issued the credit card. Can't wait for the letters to arrive & for him to get proper compensation.
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@squelchcruncher, come on, the double insurance thing isn't even the small print, it's print about a foot high. I don't spend too much time reading Ts & Cs I do, however, listen to Radio 4 whilst I work, it's amazing how much you learn by just listening.
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26 August 2013