Millions To Share £1.3bn Bank Compensation

[Jazzy]

Regulators have confirmed a compensation fund of £1.3bn for up to seven million victims of another insurance mis-selling scandal.

The announcement, which was made 12 hours after Sky News was handed details of the Financial Conduct Authority's agreement with banks, outlined how Card Protection Plan Limited (CPP) and 13 high street banks and credit card issuers would pay.

The FCA said the mis-selling centred on CPP's Card Protection and Identity Protection policies between 2005 and 2011 - with many people not even needing the cover.

York-based CPP - which has already been fined £10.5m for its behaviour - was brought to the brink of bankruptcy by the case but secured a new £36m financing deal with its lenders last month to assure its future.

The FCA said today: "Customers were given misleading and unclear information about the policies so that they bought cover that either was not needed, or to cover risks that had been greatly exaggerated.

"As well as CPP selling directly to customers, high street banks and credit card issuers introduced millions of customers to CPP," the regulator said.

It named those institutions as Bank of Scotland, Barclays, Canada Square Operations (formerly Egg), Capital One, Clydesdale, Home Retail Group Insurance Services, HSBC, MBNA, Morgan Stanley, Nationwide Building Society, Santander UK, The Royal Bank of Scotland and Tesco Personal Finance.

The scandal - while already in the public domain - marks another round of compensation by banks for their past behaviour in the wake of the mis-selling of Payment Protection Insurance (PPI) which may eventually cost UK banks a total of £20bn.

This means redress itself is not expected to be paid out until Spring 2014. The time between now and then will be spent seeking Court approval of the Scheme and ensuring CPP customers' voices are heard.

Source

Do any of you have this Card Protection Plan?