Card plan mis-sale claims invited

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Colorful stack of credit cards and shopping gift cards.  Macro with extremely shallow dof.

Seven million people mis-sold cover for bank and credit cards can begin making claims from later this month as part of a £1.3 billion compensation scheme, the City regulator has announced.

Eligible customers who bought into card protection plan (CPP) products will begin receiving claims forms this month with the first pay-outs expected from late March, the Financial Conduct Authority (FCA) said.

Forms must be returned by August 30, after which claims will not be considered.

The level of redress per person will depend on the length of the time they had the products. The scheme covers sales and renewals back to January 2005.

Customers do not need to use the services of a claims management company or law firm to complete claims forms, the FCA said.

Clive Adamson, director of supervision, said: "If you believe you were mis-sold one of these protection products, fill out and return the claim form to make sure you get your money back. Don't put it off till the last minute."

The scheme was given the green light last month after CPP customers overwhelmingly voted in favour, and it was later approved by the High Court.

York-based CPP and 13 high street banks - through which the insurance was sold - agreed to a package that will see affected policy holders receive between £100 and £300 each.

CPP was fined £10.5 million in November 2012 after regulators found it gave misleading and unclear information about credit card and identity theft insurance.

The mis-selling scandal ran from 2005 to 2011, although only a proportion of the policies sold were arranged directly through CPP.

Many customers were sent new bank cards which they had to activate by going through a CPP call centre, where they were offered insurance.

They were persuaded to spend £30 a year to insure their card, or around £80 for an identity protection policy - despite many already having cover provided by their bank or credit card firm.

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