CONSUMER campaigners are pressing for a redress scheme for people who were mis-sold cover for bank and credit cards to be reopened after just one in three of those who were eligible for compensation came forward.
Seven million people were eligible for payouts after being mis-sold card or identity protection insurance products by York-based Card Protection Plan Limited (CPP), but figures on the Financial Conduct Authority (FCA)’s website show that only 2.37 million claimants applied before a deadline to receive their compensation.
Scheme administrators paid out £450m of compensation while the remaining 4.63 million people who were eligible to apply for redress missed out on potentially collectively getting back £850m. The average payout made per claim was £190 and only one person who submitted a claim before the August 30 deadline had it rejected.
The redress scheme was approved by CPP customers in a vote last year and it became effective in January after being sanctioned by the High Court.
But consumer help website MoneySavingExpert has found that many victims mistook claim forms they have received as part of the redress scheme for payment protection insurance (PPI) junk mail, leading them to throw them in the bin.
MoneySavingExpert.com creator Martin Lewis said: “The similarity of the name of CPP with PPI – the bastion of spam – has been a curse, yet it was foreseeable and the result is as predicted.
“This redress scheme has failed and it needs to be reopened and people given a chance to get their dues.”
The FCA has said the August 30 cut-off date was a feature of the scheme that was approved by the High Court and CPP customers.
The regulator has also said that the deadline featured prominently in letters that it sent out.
The mis-selling scandal ran from 2005 to 2011, although only a proportion of the policies sold were arranged directly through CPP.