Seven million credit card users in the UK are in line for compensation of up to £300 each after Britain’s biggest banks agreed to foot the bill for years of mis-selling credit card and ID theft insurance cover.
This is the latest mis-selling scandal to hit UK banks following on from the PPI debacle which is estimated to cost UK banking Stg£20 Billion, this costliest in UK banking history.
Banks mis sold identity theft insurance
The City regulator confirmed that 13 banks and financial services companies had signed up to £1.3 billion scheme where they referred customers applying for credit and debit cards to insurance specialist CPP, which sold them policies which the regulator claims were never needed.
The Financial Conduct Authority today said that seven million customers, who either bought or renewed policies during 2005 and 2011 were in line for money.
Some 4.4 million policies were sold by CPP and the banks during the six years in question, but another 18 million were renewed.
If customers are due compensation, they will be entitled to the amount paid for their policy since January 14 2005, plus 8pc interest on any sum owed.
Banks and finance companies take another hit
Barclays, Santander, Royal Bank of Scotland, HSBC, Tesco Personal Finance and MBNA are among the 13 banks and financial institutions that face a payout.
Sources last night claimed Barclays is likely to be facing the biggest hit, in a fresh blow for new chief executive Antony Jenkins. He was chief executive of Barclaycard while some of the mis-selling was taking place.
CPP was fined £10.5 million by the FCA last year for its role in the mis-selling and has battled to stay in business ever since.
The Irish Financial Review