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FCA hits banks with £1.3bn bill in new mis-selling scandal
by William Robins on Aug 22, 2013 at 09:08
A £1.3 billion redress scheme for seven million people mis-sold credit card insurance will be paid for by the banks/
Last year the regulator fined credit card insurer Card Protection Plan (CPP) £10.5 million for mis-selling insurance products.
Last year the Financial Services Authority (FSA) said it had discovered widespread mis-selling of CPP's two main products, card protection and identity protection, between January 2005 and March 2011. It added that CPP did not provide clear information to its customers or treat them fairly.
The regulator said CPP had emphasised its card protection product would provide consumers with up to £100,000 of insurance cover, when they were already covered by their banks, and that it overstated the risks and consequences of identity theft in selling its identity protection product.
CPP sold the products through its own sales channels and high street banks, generating £354.5 million profit from 4.4 million policies over the period examined by the FSA, and renewed 18.7 million policies, generating an income of £646.5 million
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