CPP mis-selling: pay-outs to customers approved
- 9 January 2014
- From the section Business
Pay-outs to seven million people who were mis-sold insurance for their bank and credit cards can now go ahead, following a vote in London.
Customers were asked to approve the proposed compensation scheme, and 98% voted in favour.
The insurance was mis-sold by York-based CPP, which operated through 13 High Street banks and card companies.
Pay-outs are now expected to go ahead later in the spring, although approval is still needed from the High Court.
Policyholders should receive between £100 and £300 each, depending on how long they maintained their policies.
Customers were persuaded to part with £30 a year to insure their bank or credit cards, or £80 for a wider identity protection policy.
But in most cases they did not need such policies, because they were already protected by their bank or card issuer.
In some instances, those who phoned an activation number stuck on new bank cards were directed straight to a CPP salesperson.
As a result, CPP was fined £10.5m in November 2012 by the then Financial Services Authority.
The insurance company has now set aside £65.8m to pay for compensation claims. Others will be paid by the bank or card issuer concerned.