On 18 August 2015, the FCA published a press release announcing that card security product holders can start claiming compensation from late August. The deadline for such claims will then be March 2016.
Approximately two million people have bought card security products from a bank, credit card issuer or a firm called Affinion International Limited, which cost on average £25 per year since 2005 and which provided insurance to cover fraudulent use if a card is lost or stolen. However, the product was in certain respects unnecessary as the bank or card issuer was typically responsible for any transactions after the cards were reported as lost or stolen and, before reporting the matter, customers were only liable for unauthorised transactions in limited circumstances. The amount of compensation paid will depend on the length of time the customer had the product.
There was no formal investigation by the FCA into the matter, however banks and card issuers have voluntarily agreed to be part of the scheme and will provide the required funding. The first compensation payments are expected to be made from late 2015.