CPP commission rates as high as 60% for mis-sold credit card insurance

Banks and other credit card providers were receiving commission rates of up to 60% for referring customers to card insurance provider Card Protection Plan (CPP), which was guilty of mis-selling insurance policies between January 2005 and March 2011.

The Financial Conduct Authority (FCA) said most organisations were receiving 30% commission for introducing customers to CPP, but that in some instances commission rates were as high as 60%.

CPP was fined £10.5m last November after its insurance products were widely mis-sold through overstating the risk of identity theft and providing cover that was already in place from the card provider.

A redress scheme announced yesterday was agreed between the FCA, CPP and 13 high street banks to provide £1.3bn in compensation payments for customers who were mis-sold credit card and identity protection insurance by CPP.

CPP founder and majority shareholder Hamish Ogston described the compensation figure as “ridiculous” and said: “There’s never been a compensation redress scheme in history where it’s been 100%.”

Customers entitled to compensation will receive the amount they have paid for their policy, less any money paid out by the policy, plus 8% interest on the amount owed.