Britain’s biggest banks are close to an agreement with regulators to pay as much as 1.5 billion pounds ($2.4 billion) to compensate customers wrongly sold insurance for credit-card and identity theft, two people with knowledge of the talks said.
The Financial Conduct Authority may announce the settlement as soon as today, said the people, who asked not to be identified before a public announcement. The statement will include details of how consumers will be able to apply to their banks for redress, one of the people said.
Regulators said in November that CPP Group Plc, which provided the insurance for the lenders, overstated the risks and consequences of identity theft and failed to tell buyers of its card-protection product that they were already covered for losses of as much as 100,000 pounds by their banks. York, England-based CPP agreed to repay customers about 14.5 million pounds and pay a fine of 10.5 million pounds last year.
The compensation adds to the 15.5 billion pounds Britain’s banks have already set aside in redress for customers who were wrongly sold payment-protection insurance that they didn’t need.
Spokesmen for the FCA, HSBC Holdings Plc, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc declined to comment. A call to CPP, which is slated to release first-half results later today, wasn’t immediately returned. The settlement was reported earlier by Sky News.
With assistance from Sarah Jones and Gavin Finch in London. Editors: Edward Evans, Jon Menon