Card Protection Plan 10m Fine

Card Protection Plan £10m Fine.

The financial regulator, the Financial Services Authority has issued a £10.5m fine to CPP for mis-selling credit card protection and theft identity insurance.

It is claimed that when banks issued cards, they also issued a telephone number to telephone and activate their card and this call was then ‘patched’ through to CPP where additional insurance was added to the card.

Treasury Select Committee member, John Mann MP claims that banks are also to blame for this as clients are generally protected anyway for unauthorised payments on lost and stolen cards.

No issues have been raised on how these policies were sold, but merely the premiums for the cover being too high compared to the risk of loss.

Our view
In short, over 4 million policies were sold with banks profiteering yet again by upselling insurance policies and then receiving introducer commissions on the same card protection plans.