If you’re one of the nearly seven million people who’ve just received a CPP claim form, don’t dismiss it as junk mail. Up to £1.3 billion of this insurance has been missold, and if you’ve got a letter it’s likely you’ve been a victim. Many people have been asking for help filling it in, so here’s our Money Saving Expert Martin Lewis with his guide.
1. What is CPP and why is it paying money out?
Card Protection Plan Limited (CPP) sold card and ID fraud protection, both in its own name, and a huge bulk directly from banks selling versions of it too. The risks to having a problem were hugely exaggerated, so much so that many people were paying to insure themselves against something that wouldn’t actually cause them a problem.
If you were mis-sold a policy, you're entitled to whatever you paid, plus 8% interest, but minus any money paid out by the policy.
The payback pot for this mis-selling scandal is a whopping £1.3bn and redress often runs into £100s per person.
For example, card protection cost £30 per year, so if you had three years' worth, expect to get around £100 back.
ID fraud protection cost more - that was £80 per year - so if you had this for three years as well, expect to get £300+ back.
3.What will the letter be like? And does it matter if I haven’t filled in any earlier ones?
The claim letters - sent out by CPP between 10 and 26 February – are actually the third lot that have been posted. The first lot of letters that went out explained the scheme, the second were to vote for redress. If you missed those, or didn’t send them back don’t worry,you can still fill in this third one to get the cash.
You should expect to receive two separate letters if you had both card protection and identity protection. And the letters will include a claim form that has to be completed, signed and returned in the envelope provided by CPP by 30 August 2014. Though the earlier you do it the earlier the earlier you are likely to get your money.
Also be warned that CPP is only writing to people, I worry scammers will take advatange with fake emails or scams to steal your personal details, so ignore any other communications
4. How do I fill in the form?
The key section is the "why you want to be considered for compensation?" bit, but don’t try and be high fallutin here, just fill it in in plain language
For example, if it sold you card protection on the premise it'd cover transactions if your card was stolen, as the bank was responsible anyway, this was mostly pointless - so tell 'em. Or, if it exaggerated ID theft risk, saying you're liable for debt someone else takes out in your name, tell 'em.
There are a number of reasons why you won't have got a letter from CPP if you think you're eligible to get your money back.
It may just be that CPP doesn't have the correct address for you. You can contact the scheme team on 08000 83 43 93 to correct this.
If you accidentally chucked the letter away thinking it was spam, you can also contact CPP on the number above to get another one.
But remember the redress scheme is only for people mis-sold in 2005 or later. So if your case was before then, you won't have received a letter, and you’ll need to contact your bank to make a claim. If it plays silly devils, take your complaint further to the free Financial Ombudsman Service.
Also, although there are other companies out there which sell similar products,the regulator has only investigated CPP and the banks it sold through, so these are the only organisations which make up the redress scheme. However again you complain to your bank, and then to the Financial Ombudsman Service if you believe you were mis-sold.
6. Is CPP the same as PPI?
CPP isn’t the same as PPI. CPP schemes promised to insure you against card or ID fraud, while PPI covers loan, credit card or mortgage repayments if you can't repay due to accident, sickness or unemployment. There is however a chance you could have been mis-sold both, and could reclaim both as over £20bn of PPI was mis-sold.