When we think insurance, we usually think home, life or car insurance. But people mis-sold credit card insurance may now be in for a pleasant surprise.
Two million customers could be given compensation payouts after 11 banks and the Financial Conduct Authority (FCA) agreed over a plan regarding card insurance that was mis-sold.
The policies in question had names such as Card Protection, Sentinel, Sentinel Protection and Safe and Secure Plus, and will have been sold this before August 2013.
The main issue regarding these products was that they sold protection that the bank should already have covered customers for, especially fraudulent use of customer’s cards. “This was unnecessary because the customer’s card issuer was typically responsibly for any transactions after the cards were reported as being lost or stolen and, in the period before reporting the matter, customers were only liable for unauthorised transactions in limited circumstances,” the FCA said.
This basically means that customers paid for insurance for things they were already covered for.
Affected customers should receive a letter in April or May asking them to vote in favour of the scheme to go ahead, a legal requirement that may hold the process up a bit, but after, assuming the vote is a yes, customers will then be able to submit a form to receive their compensation.