New compensation scheme for credit card security policies | Debt Advice Foundation

New compensation scheme for credit card security policies

The Financial Conduct Authority has announced a new credit card-linked compensation scheme. This one relates to card security policies, most of them under the Sentinel brand name, which were sold to customers of 11 high street banks.

One of the features of the card security products was insurance to cover fraudulent use if a card was lost or stolen. However, customers were already covered, because the card companies were mostly responsible for payments made with a stolen or lost card.

The Financial Conduct Authority has announced a new credit card-linked compensation scheme. This one relates to card security policies, most of them under the Sentinel brand name, which were sold to customers of 11 high street banks.

One of the features of the card security products was insurance to cover fraudulent use if a card was lost or stolen. However, customers were already covered, because the card companies were mostly responsible for payments made with a stolen or lost card.

The banks involved are:

First Trust Bank in Northern Ireland and Allied Irish Bank (GB) in Great Britain (both part of the AIB Group (UK)

Barclays Bank

Capital One (Europe)

Clydesdale Bank

HSBC Bank

Lloyds Bank

Northern Bank Limited trading as Danske Bank

Santander UK

Tesco Personal Finance

The Co-operative Bank

The Royal Bank of Scotland.

The credit card policies were all issued by Affinion and were called:

Card Protection

Sentinel (including Sentinel Gold, Sentinel Protection and Sentinel Excel)

Safe and Secure Plus.

The compensation scheme, which has been set up voluntarily by the banks and the insurance company, will be similar to an earlier scheme for mis-sold Credit Card Protection policies (CCP).

Letters will be sent to some two million customers, asking them to approve the scheme. If it is approved, then people will have a limited time to return a compensation form.

Martin Lewis, from the MoneySavingExpert website, commented that only about a third of those eligible for CCP had claimed it within the time limit; he said many people thought the letters were junk mail from commercial PPI insurance claims companies and had thrown them away without reading them.

However, it is hoped that the Sentinel name will lead to less confusion with PPI cold-calling. The first letters,  explaining the scheme and telling customers what to do next, are from “AI Scheme Limited”  and are beginning to go out now.

Customers who do not receive a letter but think they may have a claim can contact the scheme via www.aischeme.co.uk or by calling 0800 678 1930.

For more information from the FCA, click here

To read Martin Lewis’ comments and advice, click here

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