James Daley

By James Daley

Almost 10 years ago, shortly after I made the shift from writing about investments and business to consumer personal finance, I was silly enough to buy a card protection policy from HSBC. I remember the call quite well. I'd rung up to make a routine enquiry about my credit card, when the call centre operative asked whether I was interested in buying HSBC's Cardguard - a product that would allow me to cancel all my credit and debit cards in one go and, best of all, would protect me from any losses in the event I was a victim of fraud.

I had a few different cards and at the time, and I knew nothing about the rules around bank fraud. I'd recently lost my wallet and had been worried sick about the idea that someone might find it and rack up massive bills on my cards. The salesman did a good job of scaring me into buying the product. For just £30, it didn't seem too much to pay for some proper protection. And a year later, the product automatically renewed.

Eventually, I found myself commissioned to write my first article about bank fraud, and soon worked out for myself that I had no need for HSBC's Cardguard policy. In fact, banks have an obligation to pick up the cost of bank fraud, unless they can prove you were at fault in some way. The most they can leave you on the hook for is £50 - and banks commonly refund fraud losses in full.

In total, my misadventure had cost me £60. And today - almost a decade later, I got my money back, plus interest.

Still time to claim

Millions of people were mis-sold these policies, and if you think you were one of them, there's still time to claim. You should have been contacted by CPP - the company that was behind these products. But there's likely to be plenty of people who haven't received the letters. You can find out all you need to know about the scheme on the CPP redress website.

The sums involved aren't huge, but it could run to a few hundred pounds if you bought these policies for several years. Unfortunately, you won't be covered unless you bought the policy, or at least renewed it (as I did), after 2005, when the Financial Services Authority first started regulating insurance.

Rotten culture

The CPP scandal epitomises the rotten culture in the banking sector at the time. I don't believe that HSBC would sell a product as poor as this today. But back then, when boards were under pressure to deliver double digit returns to their shareholders year in year out, a lot of bad decisions were taken.

During my time at Which?, we campaigned to get this scandal out in the open, and it was good to see CPP get fined a considerable sum for its role in this. Some might say that the banks should also have been penalised for being the agents that allowed CPP's products to be so widely sold. But I think the industry has got the message.

I'd like to think that in a world where the FCA is presiding over financial markets, we'll never see another mis-selling scandal - or not on any kind of widespread scale. Certainly, the FCA's hyperactivity has left more companies fearful of stepping out of line.

But until the conflict between shareholder and customer needs has been properly managed, it's inevitable that certain parts of the financial services industry will continue to do things which are not in their customers' interests.