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Insurance company CPP hit by record FSA fine
Card protection company CPP faces a bill of £33.4m after being censured by the City watchdog for mis-selling insurance products. The bill includes a fine of £10.5m from the Financial Services Authority - the joint largest for a retail group - and £14.5m in compensation to customers. The York-based group, which sold products aimed to protect people against identity theft, has apologised. The FSA said sales agents were encouraged to be "overly persistent". "This exposed a very large number of customers to the unacceptable risk of buying products they did not want or need," said Tracey McDermott, of the FSA.....Read more hereYou must be logged in to post a comment.
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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.....Read more here
The High Court has given its approval for seven million customers of mis-sold card and identity theft insurance to share in compensation worth £1.3billion.
LAURA SHANNON explains what is happening and how the scheme works.
WHO SOLD THE INSURANCE?
Banks, credit card companies and CPP (Card Protection Plan Ltd).
Millions of people with credit cards and debit cards were mis-sold card or identity protection policies, costing about £30 and £80 a year respectively.
However, not everyone with a policy was mis-sold.
HOW WAS IT MIS-SOLD?
The insurance promised to cover fraud and to cancel credit or debit cards that were lost or stolen. However banks are largely obliged to offer this protection anyway.
The former Financial Services Authority found widespread evidence of mis-selling of CPP’s policies and in 2012 fined it £10.5 million..........Read more here