CARD PROTECTION AND ID THEFT PAYOUTS
If you bought insurance against losing your credit or debit card or to
protect you if you ID was stolen you may be due compensation. Thirteen banks and
credit card providers have been forced to set aside £1.3 billion between them to
compensate up to seven million customers who were persuaded to buy these largely
useless products.
They were sold by a firm called CPP but most people who were bought them
responded to a sticker on a new or replacement credit or debit card. This
sticker asked the customer to ring a number to ‘activate’ their card or report
they had received it. But the process was fake. The call went straight through
to a CPP sales agent who read from a script that the Financial Services
Authority said encouraged sales to people ‘who did not need the cover’, and
‘overstated the risks of and repercussions of identity theft”.
As a result of this and other failings the FSA fined CPP £10.5 million
and ordered it to compensate those who were sold the product directly. But that
only covered about 5% of the millions of policies because almost all sales came
via the misleading stickers which banks and card providers stuck on their cards.
So now 13 of those firms will have to meet the cost of compensating customers
who were misled into phoning CPP and then mis-sold one or both of these
products.
So if you bought card protection or ID theft insurance from CPP you may
be due compensation from this scheme. The scheme covers everyone who bought or
renewed a policy from 14 January 2005 (when the FSA began regulating insurance).
It will refund all premiums paid from that date plus interest at 8%. The
products cost £35 for card protection and £84 for ID insurance. So if you paid
for several years the compensation plus interest could amount to several hundred
pounds.
The FSA judgment on these two products published last November is so
severe that most people who were sold them were in fact mis-sold and could claim
compensation. You can read that judgment here
http://www.fsa.gov.uk/static/pubs/final/card-protection-plan.pdf
Any premiums paid before 14 January 2005 are not covered by this scheme.
You may be able to make a claim directly to the bank or CPP but expect
resistance. You can then go to the Financial Ombudsman Service. Some of the
smaller business partners of CPP are not covered by this scheme. Their customers
will have to claim directly from CPP or the partner.
If you bought card protection or ID theft protection from any other
provider and you feel you were mis-sold you will have to make a complaint
directly to that firm. Again, if your claim fails go to the Financial Ombudsman.
CPP should be contacting every customer affected. But many will have moved. So
it is important that you contact CPP to let them know your new address.
Customers have to vote to approve the scheme and will then have to make a claim.
Compensation will be paid from April 2014.
You can find out more from
www.cppredressscheme.co.uk
or call free on 08000 83 43 93.
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