The FCA has launched a £1.3bn redress scheme for consumers who were missold card or identity protection products from Card Protection Plan.
CPP was fined £10.5m in November 2012 for widespread misselling of its card protection and identity protection policies and was ordered to pay redress to consumers.
Since then the FCA has been working with CPP, banks and card issuers on a redress scheme, first announced last August.
Claims forms will be sent to eligible customers this month, and must be returned by 30 August. The first payments are expected to be made from late March.
FCA director of supervision Clive Adamson says: “This is an important example of firms voluntarily coming together to meet our expectation that consumers get a fair deal.”
CPP card protection cost about £30 a year, while identity protection cost about £80 a year. The redress scheme covers sales and renewals of these products since January 2005.
The banks and credit card issuers which have signed up to the scheme are: Bank of Scotland, Barclays, Canada Square Operations (formerly Egg Banking), Capital One, Clydesdale Bank, Home Retail Group Insurance Services, HSBC, MBNA, Morgan Stanley, Nationwide, Santander, Royal Bank of Scotland and Tesco Personal Finance.
Aurora Financial Planning chartered financial planner Aj Somal says: “Communal schemes such as this are the most efficient way of providing redress as they minimise administration costs.”