Mis-sold Sentinel card protection? You’ve got eight weeks to claim compensation
More than a hundred thousand people who were mis-sold worthless card security policies have just eight weeks left to claim potentially £100s in compensation, the Financial Conduct Authority (FCA) has warned.
About 173,000 people who voted in favour of a redress scheme, officially known as the AI Scheme, are being sent reminders as they hadn’t returned their claim forms within in the first four months of the scheme’s opening.
People who didn’t actively vote for the scheme have also been sent paperwork, and have the option to claim compensation.
If you’ve got an AI Scheme claim pack and want to claim compensation, you must return your completed form before the deadline of 18 March 2016. The FCA says only original paperwork can be returned, and photocopies will not be accepted.
If you think you bought one of these products and don’t have a claim form or you’ve mislaid it, you should contact the AI Scheme helpline on 0800 678 1930 to check whether you’re eligible to claim and to request a replacement pack.
However, be aware that if you still use these products, and want to continue doing so, making a claim will terminate your policy.
Why is compensation due?
Compensation is due because these policies covered consumers from fraudulent card use. But this should never have been sold because usually your bank or card issuer is responsible for losses in the event of fraud.
The Sentinel policies, which were also known as ‘Safe and Secure Plus’ and ‘Card Protection’ among other names, were sold directly from a company called Affinion, as well as by 11 UK credit card providers:
- AIB Group (aka First Trust Bank, Allied Irish Bank)
- Capital One
- Clydesdale / Yorkshire Bank
- Lloyds Bank
- Danske Bank
- Tesco Personal Finance
- The Co-operative Bank
- The Royal Bank of Scotland
Jonathan Davidson, director of supervision, retail and authorisations at the FCA, says: “This is a straightforward process. Those with concerns about these products can make a compensation claim receive redress by simply completing and returning the short form that was sent out to them last summer.
“This simple and transparent compensation scheme applies whether customers bought the card security product from a bank, card provider, or from Affinion International Limited.”
How much compensation could I get?
Individual compensation payments depend on how long you held the insurance policy.
The product cost about £25 a year, and the FCA estimates customers are due £180 on average in compensation.
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.