The total payment protection insurance compensation package has now reached £12.96 billion this month. Financial analysts say the amount has “fatally wounded” the industry and commenting that the compensation package could reach £16 billion by next year. Aside from PPI, banks also need to worry about the identity theft and credit protection insurance sold by the company CPP.
CPP or Credit Protection Policy Limited was recently fined £10.2 million by the Financial Services Authority upon discovery of mis selling identity theft and credit protection insurance, which customers were wasting money upon. Technically, upon the loss or theft of any credit card, any purchases done to the card would be disregarded by banks and any damages will also be compensated by them, which renders the insurance technically useless.
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Upon issuing a credit card, banks place a phone number sticker of CPP on the package to activate the card. Upon activating the card, CPP takes advantage of selling insurance to their customers. The FSA’s fines reaching up to £14.2 million was due to CPP’s treatment of sales representatives, who were not paid for insurance cancellations and given great incentives when selling the insurance at the customer’s expenses.
Among the UK banks to affiliate with CPP are Barclays, HSBC, Nationwide and Santander. Halifax and Lloyds did not sell the insurance, although RBS sold the insurance before the FSA’s insurance regulation in 2005.
Claims management companies such as www.missoldppiclaimsco.co.uk are preparing their services for CPP claims. CMCs are expected by analysts to call upon customers potentially mis sold the insurance once again to the criticism of banks who may be tasked to do the same by the FSA. While not as immense as the PPI crisis, CPP is expected to follow suit with PPI claims.
