Around 7.5million people who have been mis-sold credit card insurance by banks could land £1.3billion in compensation.
The Financial Conduct Authority has named the 13 banks – including many High Street giants – which have been involved in the latest mis-selling scandal.
The banks referred customers applying for credit cards to a company called CPP who sold policies for card protection and identity protection.
Customers were given misleading and unclear information about the policies so that they bought cover that either was not needed, or to cover risks that had been greatly exaggerated.
The FCA has ruled the policies were meaningless as customers don’t need insurance for fraudulent transactions which are automatically refunded by their banks.
The banks involved in the settlement are Bank of Scotland, Barclays, Canada Square Operations (formerly Egg), Capital One, Clydesdale, Home Retail Group Insurance Services, HSBC, MBNA, Morgan Stanley, Nationwide, Santander, the Royal Bank of Scotland and Tesco Personal Finance.
Victims will receive a letter including details of how the money will be paid if they are eligible for compensation.
If customers are due compensation, they will be entitled to the amount paid for their policy since January 14th, 2005, plus eight per cent interest on any sum owed.
FCA boss Martin Wheatley said: “We believe this will be a good outcome for customers who may have been mis-sold the card and identity protection policies.”
For more information and advice about mis-sold credit card and payment protection insurance (PPI) call PM Law solicitors in Sheffield on 0114 2965444.