By . Sam Dunn . Millions of bank customers mis-sold useless credit card theft insurance are set for payouts from a £1billion compensation fund. Customers of HSBC, Barclays, Santander, NatWest and Nationwide will be paid compensations over the next few months. It follows an investigation last year by the Financial Conduct Authority into CPP, a company which sold so-called card and identity theft cover via banks between 2005 and 2011. Customers of HSBC, Barclays, Santander, NatWest and Nationwide will be paid compensations over the next few months . The City watchdog found many debit and credit card customers were duped into buying these policies which offered unnecessary cover if you lost your credit card or were victim to identity fraud. These policies, which together cost £120 a year, promised cover of up to £100,000 if crooks went on a wild spending spree with a stolen card. But banks already cover customers for this for free. And customers who thought they would be covered for up to £60,000 in losses suffered through identity theft later found out this was for legal or administration expenses – not the fraudulent debts run up. But the cost of meeting such debts is usually met by the bank itself, triggering doubts about why customers even had to pay for such a policy. After months of talks, the banks, CPP and City regulator are now close to a final compensation deal. The banks will shortly begin sending out letters to affected customers with details of how to claim. The compensation will leave the banks with an estimated £1billion bill but there are fears that it could be higher. Justin Modray said that it is thoroughly depressing to see another case of dreadful bank behaviour ripping off innocent customers . This will add more financial strain to banks on top of the £10billion recompense already racked up for mis-selling payment protection insurance. Justin Modray, founder of consumer finance website CandidMoney.com, said: ‘Although the payouts will be a welcome and long overdue boost to those households duped out of the money, it’s thoroughly depressing to see another case of dreadful bank behaviour ripping off innocent customers. ‘By asking loyal customers to pay more than £100 a year for policies that were essentially worthless,  it’s no wonder levels of trust in the high street banks is at absolute rock bottom.’ Some 4.4million card protection and identity fraud protection policies were sold between January 2005 and March 2011. Not all banks sold these policies. While many high-street operators did, Lloyds and Halifax chose not to. Roughly nine in ten were sold via banks and the rest bought directly from CPP. Many policies were also sold as part of a paid-for packaged bank account. The CPP card protection policy cost £35 a year, and identity protection £84 a year – a total  of £119. However, the report by the Financial Conduct Authority found CPP sold or renewed as many as 23million policies over a six-year period. It follows an investigation last year by the Financial Conduct Authority into CPP, a company which sold so-called card and identity theft cover via banks between 2005 and 2011 . The insurance was routinely sold whenever a customer sent a new bank credit or debit card had to call a CPP telephone number to activate the account. Staff then used high-pressure sales techniques to convince customers to take the policies out. On card protection, staff told customers the policy would cover them for between £50,000 and £100,000 of unauthorised transactions after you tell them your card has been taken. But this was unnecessary, as banks automatically cover you for this. And with identity theft protection, CPP staff would regularly overstate its importance or the threat of being defrauded. The City regulator report found some staff would wrongly tell customers that they would be liable for some of the debts if defrauded. Last year, CPP was fined £10.5million by the FCA and ordered to stop selling policies to new customers. A CPP spokesman said: ‘Our priority is to achieve the best outcome for those customers affected, and we’re helping many in difficult situations every day.’
Millions of customers will be paid compensation from a £1billion fund .
HSBC, Barclays, Santander, NatWest and Nationwide customers will be paid .
Follows an investigation into a company which sold so-called card and identity theft cover via banks between 2005 and 2011 .
By . Sam Dunn . Millions of bank customers mis-sold useless credit card theft insurance are set for payouts from a £1billion compensation fund. Customers of HSBC, Barclays, Santander, NatWest and Nationwide will be paid compensations over the next few months. It follows an investigation last year by the Financial Conduct Authority into CPP, a company which sold so-called card and identity theft cover via banks between 2005 and 2011. Customers of HSBC, Barclays, Santander, NatWest and Nationwide will be paid compensations over the next few months . The City watchdog found many debit and credit card customers were duped into buying these policies which offered unnecessary cover if you lost your credit card or were victim to identity fraud. These policies, which together cost £120 a year, promised cover of up to £100,000 if crooks went on a wild spending spree with a stolen card. But banks already cover customers for this for free. And customers who thought they would be covered for up to £60,000 in losses suffered through identity theft later found out this was for legal or administration expenses – not the fraudulent debts run up. But the cost of meeting such debts is usually met by the bank itself, triggering doubts about why customers even had to pay for such a policy. After months of talks, the banks, CPP and City regulator are now close to a final compensation deal. The banks will shortly begin sending out letters to affected customers with details of how to claim. The compensation will leave the banks with an estimated £1billion bill but there are fears that it could be higher. Justin Modray said that it is thoroughly depressing to see another case of dreadful bank behaviour ripping off innocent customers . This will add more financial strain to banks on top of the £10billion recompense already racked up for mis-selling payment protection insurance. Justin Modray, founder of consumer finance website CandidMoney.com, said: ‘Although the payouts will be a welcome and long overdue boost to those households duped out of the money, it’s thoroughly depressing to see another case of dreadful bank behaviour ripping off innocent customers. ‘By asking loyal customers to pay more than £100 a year for policies that were essentially worthless,  it’s no wonder levels of trust in the high street banks is at absolute rock bottom.’ Some 4.4million card protection and identity fraud protection policies were sold between January 2005 and March 2011. Not all banks sold these policies. While many high-street operators did, Lloyds and Halifax chose not to. Roughly nine in ten were sold via banks and the rest bought directly from CPP. Many policies were also sold as part of a paid-for packaged bank account. The CPP card protection policy cost £35 a year, and identity protection £84 a year – a total  of £119. However, the report by the Financial Conduct Authority found CPP sold or renewed as many as 23million policies over a six-year period. It follows an investigation last year by the Financial Conduct Authority into CPP, a company which sold so-called card and identity theft cover via banks between 2005 and 2011 . The insurance was routinely sold whenever a customer sent a new bank credit or debit card had to call a CPP telephone number to activate the account. Staff then used high-pressure sales techniques to convince customers to take the policies out. On card protection, staff told customers the policy would cover them for between £50,000 and £100,000 of unauthorised transactions after you tell them your card has been taken. But this was unnecessary, as banks automatically cover you for this. And with identity theft protection, CPP staff would regularly overstate its importance or the threat of being defrauded. The City regulator report found some staff would wrongly tell customers that they would be liable for some of the debts if defrauded. Last year, CPP was fined £10.5million by the FCA and ordered to stop selling policies to new customers. A CPP spokesman said: ‘Our priority is to achieve the best outcome for those customers affected, and we’re helping many in difficult situations every day.’
set for payouts from a £1billion compensation fund. Customers of HSBC, Barclays, Santander, NatWest and Nationwide will be paid compensations so-called card and identity theft cover via banks Barclays, Santander, NatWest and Nationwide will a company which sold so-called card and identity theft cover via banks between 2005 and 2011 . The