THIRTEEN of Britain’s biggest lenders yesterday unveiled plans to repay consumers £1.3bn for mis-selling credit card protection products.
Seven million customers bought the products which came from CCP and were sold through high street lenders and retailers.
They either provided loss protection already covered by the bank, or were misleadingly advertised. If customers bought card protection for £30 and ID theft cover for £80, and renewed it over several years they could be due repayments of hundreds of pounds.
CPP faces a redress bill of £29m, as well as fines and legal costs coming to a total of £54m. A total of 7m people will share the pot, receiving an average of £200 each. The banks and retail groups declined to give details of their costs.
However, it is estimated that Barclays’ bill will come in at up to £100m, Santander’s and HSBC’s at below £40m and Nationwide’s at £25m. Lloyds’ bill is likely to come in at below £40m – it owns Bank of Scotland which stopped using CCP before the 2005 cut off date. Canada Square Operations, formerly Egg, is also facing a bill in the low tens of millions.
The remainder of the £1.3bn is spread among lenders like RBS – who used CPP’s services from 2005 to 2012 – and major credit card provider MBNA. Others involved include Tesco Bank, Home Retail Insurance Services, Capital One, Morgan Stanley – who owned credit card provider Discover until 2007 – and Clydesdale Bank.
Consumers will be contacted from the end of this month and will vote on whether or not to accept the package.
“Doing it this way means customers will get redress via a simple and standardised process, so we encourage customers to approve the scheme,” said FCA boss Martin Wheatley.