Banks are set for a new wave of compensation claims as the regulator prepares a redress plan for consumers mis-sold fraud protection policies by the firm CPP.
The firm was fined £10.5 million late last year for mis-selling credit card insurance and identity theft protection policies at a cost of £35 and £84 a year respectively.
Most sales came when bank customers registered or activated debit or credit cards. Banks acted as the introducer, passing on details of customers that had taken out new cards in return for commission from CPP. More than 4.4 million people took out the policies for protection already provided for free by card issuers.
The total bill, including redress, is estimated at £34m and the Financial Conduct Authority is now finalising a plan to compensate customers that were mis-sold a policy bought either directly from CPP or through a bank.