Over two million UK consumers have a mis sold PPI, according to statistics. As the financial scandal continues to bubble up, banks may face additional costs as consumers could vote in a scheme that wuld affect security products on credit and debit cards over an eight year period.
The FCA said on Tuesday that lenders and card issuers had voluntarily agreed to compensate consumers after discussions. Barclays, HSBC, Lloyds, RBS and Affinion, which aims to improve customer loyalty, will be working with each other to resolve this.
Products such as Sentinel, Safe and Secure Plus, Card Protection and other payment protection insurance sold between Jan14, 2005 and August 2013 are considered mis sold. The total number of compensation will depend on the number of eligible consumers who pursue a claim.
CPI or card payment insurance isn’t useful because card companies are by law the ones responsible to invalidate transactions made after an identity theft unintended by the consumer is verified.
The card payment insurance costs about £25 pounds apiece. It covers credit cards that were lost and stolen. It could also mean the final compensation bill could reach £400 million pounds. Smaller than PPI’s £27 billion recompense, but nonetheless, truly financially damaging.