Millions Entitled To Card Insurance Pay-Outs

Up to two million people who were mis-sold credit card insurance can now apply for compensation of up to £270 per card.

Compensation forms will be sent out in the coming weeks with the first payments expected to be made in late September.

The Financial Conduct Authority (FCA) reached an agreement earlier this year after customers were unnecessarily sold cover costing up to £25 a year.

The FCA said elements of the insurance that protected against fraudulent use if a card is lost or stolen were unnecessary.

A card issuer is already responsible for transactions after a customer contacts them.

And before reporting loss or theft, customers are usually only liable for unauthorised transactions in exceptional circumstances.

Bank and card issuers normally provide cover for anything over the first £50.

The companies involved are: AIB Group, Barclays (LSE: BARC.L - news) , Capital One, Clydesdale Bank, HSBC, Lloyds Bank, Northern Bank, Santander, Tesco Personal Finance, the Co-operative Bank and the Royal Bank of Scotland (LSE: RBS.L - news) .

They have agreed to set up a body to write to everyone affected, informing them how to claim compensation.

The insurance was sold between January 2005 and August 2013.

Customers who were mis-sold before 2005 will have to go direct to the bank to ask for compensation.

The insurance products carried the names of either Card Protection, Sentinel, Sentinel Gold, Sentinel Protection, Sentinel Excel and Safe And Secure Plus.

Two million people are thought to be affected.

Customers can claim £25 for each year they had the cover – so if they were affected over the whole 10-year term they could claim up to £270 (including interest).

Customers have until 18 March 2016 to return their compensation claim forms (Other OTC: UBGXF - news) .