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Credit card customers to receive refunds on pointless fraud cover

Credit card customers to receive refunds on pointless fraud cover
Date of Publication: Thursday, 29 January 2015 00:08

Around two million credit card customers can expect a refund after the City regulator deemed that they were sold 'unnecessary' insurance.

 

Banks and building societies have typically sold protection products to guard against the fraudulent use of cards that are lost or stolen. The policies have typically cost consumers around £25 per year.

 

But the same institutions already pledge to refund customers as a matter of course, unless they can prove that customers acted negligently.

 

The Financial Conduct Authority (FCA) said that customers had paid to be covered twice, which was completely unnecessary.

 

The regulator recently reached an agreement with Affinion International Limited and 11 credit card providers to compensate customers who may have been mis-sold protection products.

 

The voluntary negotiation must receive the backing of customers and be ratified by the high court before compensation details can be finalised.

 

But if it does receive the go-ahead, customers will be able to claim for policies dating back to January 2005.

 

Compensation payments would depend on the number of claimants and the duration of their products, but could be worth over £250.

 

Letters explaining the process are to be sent out to eligible customers this week, with all redress payments expected to follow later this year.

 

Keith McDonald

Which4U Editor

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Thursday, 29 January 2015 00:08
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