Seven million people could be due up to several hundred pounds each. If you are one of them it is well worth claiming.
Compensation will normally be due if you bought or renewed either product from 14 January 2005. To qualify you will have to say you were mis-sold the product. The form you are sent will tell you what to say. The sales process was so bad that everyone was mis-sold.
You should NOT use a claims management firm to help you. They will just take a share of your compensation but will do nothing useful.
A few people may not be entitled. Details of who may not get compensation are set out later.
CPP will write to you between 27 August and 16 September 2013 to let you know you had one of the products. You may not get this letter if you have moved and CPP does not have your up to date address. You can call 08000 83 43 93 to let CPP know about your change of address. This number is free from landlines but from a mobile you will be charged a lot. You can also call that number if you are not sure if you had a policy. If you ring before 20 September you may be asked to wait to see if you get the letter. But if you have moved you should insist that CPP checks your details.
CPP will write to you inviting you to vote for the compensation scheme. You should vote ‘yes’ and return the form in the stamped addressed envelope supplied. You will have until 31 December 2013 to return the form.
If the scheme is approved on 14 January 2014 (it should be) you will be sent a form inviting you to claim compensation for being mis-sold. The sooner your return the form the sooner you will be paid. Payments will be made from April 2014. You must return this form by 31 July 2014. If you claim compensation and you are still paying for the product that will stop and you will no longer be covered by it. The consensus is that these products offered little that was of use and were not worth the high premiums charged. Card protection insurance cost CPP 60p but it sold it for more than 30 a year.
On this form you will have to say why you think you were mis-sold. The form will tell you the kind of things to say. The products were sold so badly that everyone should get compensation.
If you are refused compensation or disagree with the amount there will be a way to challenge it.
All these dates are targets and it is possible some may change. This guide will be updated.
You will get all the premiums paid from 14 January 2005 refunded. Interest at 8% a year will be added to those premiums from the date they were paid until around the middle of March 2014. Tax at 20% will be deducted from the interest but not from the compensation. People who do not pay tax can reclaim it. People who pay a higher rate of tax will have to pay extra. Any money already paid out on the insurance will be deducted from the compensation.
The CPP card protection product was sold under various names such as CardGuard, Card Safe, Card Protection, Cardholder Protection and Egg Emergency Cover. The ID theft product was sold under the name CPP Identity Protection. Most people bought the products after calling a number on a new or replacement credit or debit card to ‘activate’ it or reports its safe delivery. Those cards will have come from your bank or card provider but the product was supplied by CPP.
Apart from CPP itself the firms in the scheme are
· Bank of Scotland (part of Lloyds Banking Group)
· Barclays Bank
· Canada Square Operations Limited (formerly Egg Banking)
· Capital One (Europe) Plc
· Clydesdale Bank Plc (part of National Australia Group Europe)
· Home Retail Group Insurance Services Limited
· HSBC Bank Plc
· MBNA Limited
· Morgan Stanley Bank International Limited
· Nationwide Building Society
· Santander UK Plc
· The Royal Bank of Scotland Plc
· Tesco Personal Finance Plc
So if you were encouraged to buy the product by any of those firms you will be in the compensation scheme.
A few people who have one of these products may not get compensation through this scheme. But they can still claim compensation through the usual channels – put in a formal complaint and if it is refused go to the Financial Ombudsman Service.
The card protection product was changed in 2011. If you bought it for the first time after it was changed you will not be covered by the scheme. The date of change varies depending on your card provider but it is between 1 March 2011 and 18 September 2011.
The ID theft product was not changed and is covered for all dates. However, CPP Identity Protection is not covered if it was bought face to face or online. Only telephone sales are covered.
Other things that are not covered:-
· Premiums paid before 14 January 2005 are not covered by the scheme. That's because insurance was not regulated by the Financial Services Authority until that date.
· Similar card protection or ID theft insurance from other companies is not covered.
· Some CPP products were sold by firms that are not one of the 13 firms in the scheme which are listed above. Discussions are going on with those smaller business partners to see what compensation they may pay.
Remember, even if your product is not covered, you can still try to get compensation by putting in a formal complaint and if it is refused go to the Financial Ombudsman Service.
The website run by CPP is quite helpful www.cppredressscheme.co.uk. The full details of the scheme are contained in the Explanatory Statement on the front page. The website implies that if you do not get a letter by 20 September you are not in the scheme. That is not true. You may simply have moved so the letter does not reach you. The website should be changed to reflect that fact shortly.
My blogpost on how the banks and card providers have got away with impunity over their part in this mis-selling http://goo.gl/lg7H9B
CPP claims 1.02
29 August 2013