What you should do if you think you were mis-sold a card protection or identity protection policy on your credit card
How do I know if I had a mis-sold CPP policy?
Most of the people affected by the announcement took out a CPP policy via their bank. Banks that sold the policies include Santander, Barclays, HSBC, RBS/NatWest and building society Nationwide. Halifax and Lloyds did not sell it. Bank of Scotland did but only before 2005 – the official start date for claims against CPP.
A number of the banks “introduced” their customers to CPP by affixing a sticker to credit or debit cards sent to customers. This prompted the customer to call a number, belonging to CPP, either to activate the card or confirm receipt of it. When the customer called CPP also used the opportunity to offer card protection and/or identity protection to the customer. Some banks made it clear to their customers that they were talking to CPP, others didn’t.
Other firms, including HSBC and Nationwide, did sell the products but not through card activation. It is believed, though no one was available at the banks or CPP to confirm this, that some of the policies may have been sold as part of a packaged current account.
CPP sold a small amount of products directly itself. It has set aside £14.5m in compensation for these, but the bill could be higher if other customers come forward.
Will I be contacted if I have been mis-sold a CPP policy?
The FSA and CPP are currently in talks with the banks about how any redress will be paid, so it is unclear whether your bank will write to you to inform you that you are affected or not. Given the fact the banks have to do this with PPI claims, the hope is that they will be similarly proactive.
If you took out a policy via CPP it will be writing to you in the coming months to tell you you were mis-sold the product and are entitled to claim.
In any case you could start doing some research. If you bought directly from CPP the two mis-sold products are called card protection and identity protection. Card protection was the most widely sold and most people took it out because it meant CPP would deal with cancelling and replacing cards if they were lost or stolen.
However, both products were often rebanded by the banks that sold them. So, for example, HSBC called the card protection product card guard, M&S Money called it card safe, and First Direct sold it as First Direct card protection.
If I did take out a policy pre-2005 can I pursue them?
The reason for the January 2005 start date is that this is when the FSA started regulating general insurance sales. This means it cannot enforce any redress due to customers sold a policy before this time. This does not mean you cannot claim for it, but it could be more tricky – and almost impossible if you don’t have the paperwork.
Either way, you should still approach CPP or your bank and say you want to make a claim. If they have details of your policy but refuse to pay out on it you could take your case to the Financial Ombudsman Service. If neither you or CPP have details of your policy you will struggle to claim.
The FSA has indicated that if you renewed an existing policy after January 2005 this would be counted as a new sale and you would be liable for compensation.
Are these policies always rubbish?
Some elements of the CPP products could be viewed as beneficial, including the single number service that cancelled and replaced all lost or stolen cards. It is the insurance elements that are almost always a waste of money. The card protection product was offering £100,000 of insurance cover if you were the victim of fraud because of a stolen card – but banks cover you for this anyway. Banks will also reimburse you in most cases of identity theft, rendering the identity protection insurance a largely useless product.
How much money will I get back?
CPP says this detail is still to be worked out with the FSA. However, if the redress is the same as that for PPI you should expect to get back all the premiums you paid into the policy from the date you took it out to the date you closed the policy (or up until the date you make the claim if you are still paying into it), plus 8% interest.
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