Another case of insurance mis-selling has hit the headlines recently. As many as 2 million people in the UK may be entitled to claim compensation after being sold unnecessary fraud protection insurance for their credit card.
According to the Financial Times, 11 banks and credit card providers marketed the insurance from Affinion International Limited. These policies offered cover against the fraudulent use of lost or stolen credit cards for around £25 per year.
Taking out this extra insurance was unnecessary and meant that customers faced extra costs. Without insurance, customers are usually only responsible if their credit card is used for unauthorised payments of less than £50. Even then it’s paid only in certain circumstances, and only before they report the card lost or stolen.
The Financial Conduct Authority (FCA), the body which regulates the industry, hasn’t conducted a formal investigation, and Affinion hasn’t admitted any liability. However Affinion and a range of well-known banks have agreed to take part in the scheme to compensate customers who may have been affected.