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Mis-sold CPP card protection & identity insurance?

As the banking sector serves up yet another scandal, we show you how to claim compensation if you were mis-sold credit card protection and identity insurance.

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The FCA has ruled that CPP credit card protection insurance and identity protection policies were unfairly sold to millions.

That means another mis-selling scandal, and another big bucks compensation package that you could be owed a slice of.

We explain how to tell if you were mis-sold and exactly what you need to do to claim.

The CPP mis-selling scandal

This banking scandal centres on two insurance products sold by banks, credit card providers and by the company that underwrote the policies: Card Protection Plan Ltd (CPP).

CPP credit card protection and identity protection plans were sold alongside credit cards to give protection against credit card fraud and identity theft, respectively.

Typically, the policies were sold when you rang up your card provider to activate a new credit card, however the risk was overstated in many cases and the providers often 'forgot' to mention that they were non-essential so many people took them out unnecessarily.

Having fined CPP a sum of £10.5 million in November 2012, the Financial Conduct Authority has now ordered them to pay customers £1.3 billion in compensation.

CPP cannot afford that amount, so instead the card providers that were originally involved in selling the policies have set up a scheme to compensate their affected customers directly.


The mis-selling dates back over 10 years costing consumers anywhere between £30 and £80 per year per policy - all spent on unwanted and unnecessary insurance.

Who mis-sold CPP insurance?

Thirteen banks and credit card companies involved in mis-selling CPP card protection and CPP identity protection policies have signed up to the compensation scheme.

The culprits included:

  • 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

  • Tesco Personal Finance

If you were mis-sold a policy from a bank that is not listed above, CPP itself should be responsible for compensating you.

Were you mis-sold credit card insurance?

In all, more than seven million customers were mis-sold CPP insurance; taking into account renewals around 23 million policies are due to be reimbursed.

Approximately 18 million of these were existing plans renewed after January 2005 and about 4.5 million were new policies bought from January 2005 onwards. They were mis-sold if:

  • You did not realise the plan was being offered by CPP, a third party

  • You were not aware you were already covered by the bank's own anti-fraud policies

  • Your bank told you it was an essential purchase

  • You purchased your policy based on unclear information

  • The risks the insurance protects against were overstated

If you were sold CPP insurance alongside a credit card, think about how you were offered the policy. Cover that was taken out or renewed from January 2005 onwards could put you directly in line for repayment.

If you had a CPP policy that ended before January 2005 you will not be eligible for the scheme and, if you want redress, you will have to lodge a complaint with CPP independently.

How to get CPP compensation

If you have moved house since buying your policy, contact CPP to change your address on their files. Ongoing, CPP will be writing to all customers it believes are due compensation to sort out the compensation scheme:

  • First letter from CPP: No action was required, it simply explained the scheme and what you would need to do moving forward. This was sent in September 2013

  • Second letter from CPP: you were asked to vote either for or against the proposed compensation scheme. The scheme received the majority 'YES' vote it needed to progress through the High Court. The vote was passed in January 2014

  • Third Letter from CPP: this letter should be next to arrive, from 10th February 2014, asking if you want to be considered for compensation. Check your historic finances as noted above to find out if you were mis-sold a policy and make sure you respond with a 'YES'. If you did not receive the letter, gather as much evidence as you can about your CPP policy and related card(s) and write to CPP direct, asking to be considered for compensation

  • CPP claim form: forms should be sent with CPP's February letter, or directly as a result of your correspondence with CPP. To claim compensation from CPP or your bank you will need to complete the form, sign it and return it by 30th August 2014

If you have any questions regarding the scheme you will need to refer to the Financial Conduct Authority CPP guide and contact the CPP Redress Scheme.

If you are not happy with the way compensation scheme deals with your claim, you can refer it to the Financial Ombudsman. However, the Ombudsman can only deal with your claim according to the scheme's rules and you will lose even this recourse if you miss the August deadline.

How much CPP compensation will you get?

You should have all premiums since 14th January 2005 refunded (this is the date the FCA took over regulation of such products) with 8% interest added to the net sum.

Any claims paid out since that date will be deducted from your personal redress.

Payouts for identity protection and CPP card protection claims will be paid in spring 2014, with customers expected to receive around £170 each on average.

Did you know

Your bank or card issuer will pay any compensation directly into your specified account.

What if you do not receive a letter from CPP?

You will not receive a letter if you are not eligible for the compensation scheme. This could be for one of the following reasons:

  • You took out your policy before 14 January 2005 and made no payments for it after this date

  • You took out a policy after March 2011 when CPP had changed the way it sold protection policies

  • You held an identity protection CPP policy that was not purchased by telephone

  • The policy holder has died

  • The bank or card issuer you purchased your policy from is not part of the compensation scheme

  • You have already received more back (via paid claims or refunds) than you would be owed under the compensation scheme

  • The amount of compensation you are owed is less than £5, which is the minimum amount required to be part of the scheme

However, you do not need to take it lying down. If you think you should have received a letter, but did not, gather as much information as possible on your CPP policy and dispute the reasons listed above.

Even if you are not eligible for the compensation scheme, you can still try to claim your premiums back independently. Plus, if you were not included in the scheme the Financial Ombudsman will not be restricted by it either.

CPP card protection complaints should be sent direct to CPP and copied to the bank or card issuer you believe mis-sold your policy, e.g. claiming CPP from MBNA.

Visit the CPP Redress Scheme website here for more information

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