TWO MILLION credit card borrowers could be owed compensation for mis-sold insurance products, the Financial Conduct Authority (FCA) said yesterday.
The announcement opens the way for a new wave of claims against 11 high street banks.
The Affinion International security products were sold through the banks, and typically cost £25 per year, and the FCA is concerned about some sales between 2005 and 2013.
The protection was sold to cover issues like fraudulent payment on a stolen card – even though the card provider was already responsible for those costs.
Customers will receive a letter in the coming months asking them to vote on the scheme, which will open the way for them to claim a refund.
“We have been encouraged that, working closely with the FCA, a large number of firms have voluntarily come together to create a redress scheme that will provide a fair outcome for customers,” said FCA supervision boss Tracey McDermott.
“Such a willingness to take steps to resolve historic problems is an important step to restoring trust in the financial services.”