Some seven million United Kingdom consumers are in line to receive compensation up to £300 (US$467) after 13 leading financial institutions agreed to reimburse their customers for selling them unnecessary credit card insurance. The financial institutions include Barclays, Santander, Royal Bank of Scotland, HSBC, Tesco Personal Finance and MBNA.
The Financial Conduct Authority stated that in most cases, the credit card and ID theft insurance the banks sold was not required because customers already had protection from the bank when they were approved for their cards, according to The Telegraph. The regulator set the compensation, which will see consumers refunded for the amount of insurance paid since January 14th 2005, plus 8 percent interest on any sum owed.
Martin Wheatley, FCA chief executive commented on the announcement:
“We believe this will be a good outcome for customers who may have been mis-sold the card and identity protection policies. Subject to CPP’s customers approving the scheme, these policy holders will be able to claim a full refund of premiums with interest.”
While the announcement is a significant win for consumers, advocacy groups, and regulators, those consumers eligible for compensation will not see a refund check anytime soon. No payments are expected to be made until 2014, and not until the High Court has agreed to the settlement.
Click here to read more from The Telegraph.
