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PS1bn compensation deal given the green light.

AROUND seven million people missold cover for bank and credit cards are set to receive payouts after a PS1.3bn compensation deal was given the green light.

Credit card insurer CPP said customers had overwhelmingly backed the proposed compensation scheme, with 98% voting in favour, which now paves the way for payouts to begin in the spring, subject to High Court approval next week.

York-based CPP and 13 high street banks and card companies - through which the insurance was sold - have agreed to a package that will see affected policyholders receive between PS100 and PS300 each. CPP was fined PS10.5m in November 2012 after regulators found it gave misleading information about credit card and identity theft insurance.

The mis-selling scandal ran from 2005 to 2011, although only a proportion of the policies sold were arranged directly through CPP.

Many customers were sent new bank cards which they had to activate by going through a CPP call centre, where they were offered insurance.

They were persuaded to spend PS30 a year to insure their card, or around PS80 for an identity protection policy - despite many already having cover provided by their bank or credit card firm.
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Title Annotation:Business
Publication:The Journal (Newcastle, England)
Date:Jan 10, 2014
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