Search Share Prices
MPs warn Barclays not to halt compensation for card mis-selling victims
Parliament has warned Barclays not to halt payouts to 80,000 customers who were mis-sold credit card plans or it could lead to customers being entitled to compensation of £200m.
The payouts have been halted due to a legal row between Barclays and the US company that acquired the card business ten years ago.
Now CCUK, a British subsidiary of a company based in the US, is appealing to the High Court to force Barclays to compensate the 80,000 individuals that were affected by the mis-sold credit card plans.
Labour MP John Mann, a member of the Treasury Select Committee, wrote to the Financial Conduct Authority asking it to protect consumers.
And Vince Cable, the Liberal Democrat leader, urged Barclays to keep the fund open or risk getting involved in a mis-selling scandal.
CCUK bought the credit card business Monument from Barclays but later realised that many of its new customers had bought toxic insurance that they wouldn't benefit from.
Barclays agreed to indemnify CCUK for the compensation claims that might arise, going on to pay about £350m to 120,000 people but CCUK has complained that the payments had stopped.
That was after the company sued Barclays over the deal, seeking £1.1bn, the original price it paid for the business plus damages.
A CCUK spokesman said: "We have ample evidence that Barclays' sales teams targeted vulnerable credit card customers with scripted calls and other manipulative sales techniques. In nearly all cases, they were selling a product that customers didn't need."
"This product was a rip-off by any definition. Our records show that only 5 per cent of the people who were sold the payment break plan actually tried to use it and, of those, only half succeeded," he added.
A spokesman for Barclays said: "Our priority is for customers who were mis-sold PBP to be compensated. CCUK is now standing in the way of that compensation by refusing to co-operate with simple requests we have made for information since September last year."