The banking industry is yet again at its mis-selling and profiteering activities as now, an estimated 3.5 million customers were mis sold another insurance policy. The credit payment protection or CPP insurance policy, was rendered useless by the Financial Services Authority this month. An estimated £2 billion worth of compensation package were guaranteed by banks following the situation. Analysts state that this could put banks on the red line right after PPI claims.
CPP or Credit Payment Protection protected customers from identity theft damages resulting from losses or theft. However, by law, banks are to compensate customers for any proven identity theft transactions made under their name after reporting a card loss, rendering the insurance useless. The company, CPP, allegedly mis sold £14.5 million worth of insurance policies.
Banks are involved in the situation as they have placed stickers on released credit cards that CPP will activate upon customer call. Upon calling, CPP takes time to offer insurance to customers, sometimes introducing the insurance as coming from the parent bank. The pressure placed by CPP on its sales representatives were the root core of the mis selling.
The banking industry is still deciding on how to tackle the situation as it can entail more losses for the industry right after the £13 billion payment protection insurance compensation package for the United Kingdom, which is still rising. Analysts state that the CPP scandal is another devastating blow to the banking industry’s “bad practices” and profit making schemes.
More information on claiming back mis sold ppi is available here.