The Financial Conduct Authority (FCA) has released a timescale for premiums charged on mis-sold credit card protection policies to be refunded.
Mis-sold credit card protection policies – which were sold by banks to more than 2 million customers – are considered “worthless” by the FCA, as they were marketed as offering protection against the fraudulent use of a credit card if the card was lost or stolen and duplicated the protection already offered by the credit card provider.
Usually having an annual premium of £25.00, the mis-sold credit card policies have been in existence since 2005 – meaning that some customers could have paid up to 2015 for protection that they already had. After reaching an agreement with the banks and other credit providers that mis-sold the product, the FCA has released a timescale for the premiums to be refunded to customers.
Timescale for the Refund of Mis-Sold Policy Premiums
According to the FCA, letters from the company handling the refund of premiums (AI Scheme Limited) will be sent at the end of the month to customers entitled to a refund for mis-sold credit card protection policies. The letters will ask eligible customers to vote on whether they want the refund scheme to go ahead as detailed below.
Provided that the majority of eligible customers have voted for a refund of their mis-sold credit card protection policies under the scheme, the High Court will be asked in April or May to approve the scheme. When approval is received, AI Scheme Limited will again write to eligible customers with a form to claim a refund of the premiums plus 8% interest as compensation.
When customers complete and return the forms, AI Scheme Limited will distribute the refunds according to how much is due to each customer. The timescale for the refund of mis-sold policy premiums is scheduled for September and October 2015.
Which Banks Mis-Sold Credit Card Protection Policies?
The mis-sold credit card protection policies were marketed under the names of Sentinel, and Safe and Secure Plus. They were also directly available through Affinion International Limited and customers who bought them directly will also be eligible for a refund of the premiums they paid. More recognisable retailers that mis-sold credit card protection policies include:
- AIB Group (UK) Plc including First Trust Bank and Allied Irish Bank
- Barclays Bank Plc
- Capital One (Europe) Plc
- Clydesdale Bank Plc
- HSBC Bank Plc
- Lloyds Bank Plc
- Northern Bank Limited trading as Danske Bank
- Santander UK Plc
- Tesco Personal Finance plc
- The Co-operative Bank Plc
- The Royal Bank of Scotland Plc
Tracey McDermott – the FCA´s Director of Supervision and Authorisations – recommended that any eligible customer who receives a ballet paper from AI Scheme Limited should vote in favour of refunding the premiums for the mis-sold credit card protection policies. She said: “If approved, this scheme will provide those who may have concerns about the way their card security product was sold to them with a simple and free way to claim compensation.”Read More