Which? executive director Richard Lloyd said:
“ID theft insurance and card protection policies are poor value for money and many consumers were mis-led about the benefits, so it’s good to see the Financial Conduct Authority (FCA) taking action against CPP. These policies were widely mis-sold so the FCA should name other firms they are investigating, and make it as easy as possible for people to get their money back.”
1. Which? first raised questions about these policies back in July 2009 and in 2011 we submitted evidence of numerous examples of aggressive selling techniques and companies flouting the rules to the FSA.
2. You will need to respond to the letter from CPP to be considered for compensation.
3. If you’ve been mis-sold by a company other than CPP then you should complain to your bank or card provider, cancel your policy and ask for a refund. If your bank refuses, or you are still waiting for compensation, you should take your complaint to the Financial Ombudsman.
4. Some banks “introduced” their customers to CPP by affixing a sticker to the new credit or debit cards sent to their customers. The sticker prompted the customer to call a number (which was actually CPP’s) to activate the card or to confirm receipt, and when the customer rang this number, CPP attempted to sell them ID theft insurance or Card Protection Plans. Consumers were charged around £35 a year for Card Protection Plans – of this £35, the insurance cost just 60p, with the remaining £34.40 shared between CPP and the Bank. Consumers were charged around £84 per year for ID theft insurance. Of this £84 the insurance cost just £16, with the remaining £68 being shared between CPP and the bank. As much as 50% of this amount was paid to banks referring their customers to CPP.