Card holders ‘could get PPI compensation’

The news comes after the Financial Services Authority (FSA) announced that it is imposing fines of more than £600,000 on GE Capital Bank, which operates cards on behalf of retailers.

PPI is an insurance product that will repay the outstanding debt on a personal loan or other unsecured type of credit if the borrower is unable to repay due to life-changing issue such as ill-health or redundancy.

Compensation claims from consumers sold PPI on store or credit cards will be dependent upon the information they received from in-store service assistants when signing up for the service.

“We are determined to see significantly better practice in PPI sales and will crack down where firms fail to treat their customers fairly,” commented Margaret Cole, director of enforcement at the FSA.

She added that customers “need to know that PPI is almost always optional and should consider whether they need it”.

GE Capital Bank was presented with the fine by the FSA after investigators discovered that some of the key details about payment cover deals on cards were not explained properly to customers.