London - British authorities confirmed Thursday they had ordered 13 banks and card issuers and an insurance company to pay customers up to 1.3 billion pounds (2 billion dollars) for mis-selling policies to customers.
Card Protection Plan Limited (CPP) sold credit card and identity-protection insurance policies, costing around 30 and 80
pounds per year, to 7 million customers who did not need them, the Financial Conduct Authority (FCA) said.
The regulator had found “widespread mis-selling of card protection and identity protection policies which were provided by CPP and sold by several banks, credit card issuers and directly by the firm,” it said in a statement.
These companies included high-street banks HSBC, Barclays and Royal Bank of Scotland and credit-card issuers MBNA and Capital One. The share each company had to pay was not disclosed.
Customers were generally not informed that the insurance cover “was not needed because customers were already covered by their banks,” it said.
CPP also “overstated the risks and consequences of identity theft.”
Because banks and credit card issuers introduced millions of customers to CPP, they bore a share of the responsibility, the regulator said.
The compensation adds to the 15.5 billion pounds that banks already set aside for customers sold unnecessary payment-protection insurance.
The FCA already fined CPP 10.5 million pounds in November 2012.
The company has also set aside 14.5 million pounds for compensation.
CPP said it had been hit hard by the redress agreements, announcing a loss of 3.5 million pounds Thursday. - Sapa-dpa