YORK credit card insurer CPP is to begin paying millions of pounds to customers as a compensation scheme is given High Court approval.
Last week customers of the Holgate-based firm voted in favour of a redress scheme, which sets out to pay compensation to those mis-sold insurance from 2005.
Yesterday the High Court sanctioned the scheme to review claims and, where appropriate, pay redress to customers, with the scheme to become effective on or around January 31.
CPP had previously said that, if approved, compensation payments could begin from the spring.
CPP Group chief executive Brent Escott said: “A key priority is to achieve the best outcome for customers affected by the historical issues in the UK business, and customer and High Court approval for the Scheme marks a further step forward in this process.”
CPP announced last month it had increased its provision for customer redress and associated costs to £65.8 million, reflecting a proportionately higher level of votes from the scheme creditors for whom CPP is directly responsible. The company will now join 13 high-street banks in paying an estimated £1.3 billion compensation as part of the scheme.
After fining CPP a record £10.5 million in November 2012 for mis-selling insurance products, the Financial Conduct Authority revealed in August last year the redress scheme in which banks and financial institutions, along with CPP, will pay compensation to as many as seven million people in the UK who were sold policies between 2005 and 2011.
The banks and credit card issuers set to join CPP in the redress scheme are Bank of Scotland, Barclays, Canada Square Operations, Capital One (Europe), Clydesdale Bank, Home Retail Group Insurance Services, HSBC, MBNA, Morgan Stanley, Nationwide Building Society, Santander UK, The Royal Bank of Scotland and Tesco Personal Finance.