The Canadian Press - ONLINE EDITION

UK officials strike 1.3 billion pound ($2 billion) deal for consumers over mis-sold insurance

  • Print

LONDON - British financial regulators struck a deal Thursday to give consumers as much as 1.3 billion pounds ($2 billion) in compensation after they were improperly sold credit card insurance.

The Financial Conduct Authority reached an agreement with Card Protection Plan Ltd and 13 banks and credit card issuers to repay some 7 million customers for insurance policies that offered coverage already provided by the banks or for overstating the risks of identity theft.

The authority fined CPP 10.5 million pounds last year for selling consumers insurance they didn't need or to cover risks that were greatly exaggerated. But the authority said it was encouraging that a deal could be reached to get customers their money back with interest.

"We believe this will be a good outcome for customers who may have been mis-sold the card and identity protection policies," said Martin Wheatley, chief executive of the FCA.

The deal must still be approved by Britain's High Court. CPP's customers will also be allowed to vote to make sure a majority approve of the settlement. Funds are not expected to be paid out until next year.

"Subject to CPP's customers approving the scheme, these policy holders will be able to claim a full refund of premiums with interest," Wheatley said.

The authority says customers will soon receive letters on the process. The redress per customer will depend on the type of policy they owned and how long it was held.

The scandal comes as another blow to banks, which have already been hit with fines for wrongly selling payment protection insurance. Those involved in Thursday's deal include Bank of Scotland (part of Lloyds Banking Group); Barclays, HSBC, Santander and Royal Bank of Scotland.

The authority said that banks and credit card issuers were involved because "they introduced customers to CPP's products and so must share responsibility for putting things right."

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Your top TV picks for August 25-28

View more like this

Photo Store Gallery

  • A young goose   reaches for long strands of grass Friday night near McGillvary Blvd-See Bryksa 30 Day goose challenge- Day 19 - May 23, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A gaggle of Canada geese goslings at Woodsworth Park in Winnipeg Monday- See Project Honk Day 05- May 07, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Did you suffer any damages from Thursday's storm?

View Results

View Related Story

Ads by Google