Credit Card Fraud Protection misselling compensation payout has begun. Up to two million UK credit card users can now claim compensation from being missold unnecessary fraud protection. This comes after a raft of payouts by banks due to mis-selling of products in the past few years.
Fraud insurance is meant to provide cover for fraudulent use of lost or stolen credit cards, however, it is usually the bank or card issuers that made these payouts. This next set of payouts are in addition to the £27 billion set aside by lenders to pay out for compensation over Payment Protection Insurance. This was for individuals who, unable to work, could ensure that their loan payments were covered.
The misspelling of these saw many people unable to use it due to small print exclusions. The insurance comes from Affinion International Limited and there are 11 banks and credit card providers who have promoted their product, some of which include, Santandar, Royal Bank of Scotland, HSBC, Allied Irish Bank, Tesco Personal Finance, Co-Operative Bank, and Capital One.
The Financial Conduct Authority FCA implemented this scheme before holding an investigation because Affinion took part in voluntary talks about it, however they have not admitted liability.
The FCA have stated that elements of fraud insurance was unnecessary because the card issuer is already responsible for the transaction once a customer contacts
them, before this time the customer is only usually liable for unauthorized transactions under exceptional circumstances and usually only up to £50.
This latest case covers a range of insurance products sold since January 2005 up to August 2013, costing consumers around £25 per year each. The maximum that you can apply for is up to £270 per card. If you believe that you were mis-sold prior to January 2005, you will need to contact your bank directly to ask for compensation.
According to the Times, consumers must apply for this compensation by April 2016. The company set up to handle it is called Al Scheme Limited. The products covered in this compensation scheme are as follows: Card Protection, Sentinel, Sentinel Gold, Sentinel Protection, Sentinel Excel and Safe and Secure Plus.