Banks to pay compensation for useless credit card insurance

About two million consumers who bought credit card fraud insurance will be entitled to compensation of up to £270 each, the Financial Conduct Authority said,#

Anyone who bought a card security product from a bank, credit card issuer, or from a firm called Affinion International may be entitled to compensation, the FCA said.

Based on an annual charge of £25, the amount of compensation will depend on how long the product was held.

The FCA said the insurance was unnecessary because card issuers were already responsible for any charges incurred once cards were reported as lost or stolen, and banks typically covered any transaction over £50 before the loss was reported.

Tbhe scheme is being funded by Affinion and the card issuers, the FCA said.