Only 1 in 3 claim credit card compensation

Two-thirds of eligible consumers failed to make claims for mis-sold card and identity protection, potentially missing out on roughly £850m in compensation.

Only 2.4m of an estimated 7m customers who purchased protection policies from insurance provider CPP received redress under a voluntary scheme that closed last August.

Overall compensation could have amounted to £1.3bn, but only £451m has been reimbursed by CPP and the lenders with whom it partnered, according to figures released by the Financial Conduct Authority.

The payouts, which included the cost of policies plus annual interest of 8 per cent, averaged £190. The FCA said that only one claim submitted by the deadline was rejected.

Sarah Pennells, founder of consumer website SavvyWoman, said the relatively low uptake of the redress scheme may in part be explained by the relatively small amounts in question.

"While not insignificant, we are looking at a couple of hundred pounds, not like [payment protection insurance] where thousands were usually at stake."

Ms Pennells said, however, that many consumers were prevented from claiming in the final days before the deadline by restrictive procedures. "I was inundated by people either unable to download the claims form or who didn't have their details sent out months before."

The redress scheme was launched early in 2014 after the FCA found widespread mis-selling of insurance to customers whose credit card issuers already provided the same cover.

While CPP was fined £10.5m for directly selling the card and identity protection policies, which typically cost £30 and £80 a year respectively, nearby every major UK bank was also involved.

A total of 13 voluntarily took part in the compensation scheme, including Barclays, HSBC and the Royal Bank of Scotland, which covered 23m policies entered into since January 2005.

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