Alert: card protection compensation deadline this Saturday
People who were mis-sold card protection and identity protection policies now have until tomorrow to submit their compensation claims to the Financial Conduct Authority (FCA).
Last year, the UK's high street banks and credit card providers, along with Card Protection Plan Limited (CPP), agreed a £1.3 billion compensation package with the FCA to compensate up to seven million Brits who were mis-sold the financial products.
Card protection typically cost around £30 a year, while identity protection was more expensive at around £80 a year. Both were widely mis-sold by CPP, leading to a £10.5 million fine in 2012.
Compensation claim forms must reach the FCA by 30 August, though it is recommending people act as soon as possible to make sure their claim is processed in good time. Claimants must also use the original form they were sent by CPP.
Still time to claim
Clive Adamson, director of supervision at the FCA, said: "The CPP redress scheme is drawing to a close but there is still time for people who have not claimed to do so.
"If you believe you were mis-sold one of these CPP protection products but did not get a letter or threw it away, contact the CPP Scheme helpline immediately and check whether you are eligible to claim.
"This simple and transparent compensation process means that customers who believe they were mis-sold the product have an opportunity to get their money back with interest, regardless of whether they bought the protection product from a bank, card provider, or CPP."
The amount of compensation a person will get will depend on the length of time they had the policy for and the type of policy they bought. The average compensation claim per customer to date stands at £188.
For more information visit cppredressscheme.co.uk.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.