American Express (Amex) customers who currently have, or have had, its My Essentials and Back on Track policies with additional card protection in the past, will be refunded the premiums paid for the worthless add-on cover.
The credit card provider says it's "recognised" that 9,000 customers were unnecessarily paying for cover against unauthorised spending on their cards, as card issuers are typically responsible for fraudulent transactions anyway.
In addition, it says that when it sold the My Essentials and Back on Track policies, it didn't make clear that customers could get these without the add-on card protection product.
It follows the similar mis-selling of worthless card protection products by both CPP and Sentinel (see our Reclaim Sentinel guide for how to get £100s back).
As a result, Amex says it is contacting customers to provide refunds for the add-on card protection element. It says its aim is to "ensure customers are always treated fairly". Here's what you need to know.
What do My Essentials and Back on Track cover?
My Essentials and Back on Track primarily provide users with protection against loss, theft or accidental damage to their gadgets, mobile phones, keys and personal possessions.
Card protection was sold as a separate add-on to these products and included services such as key and luggage retrieval, as well as the worthless unauthorised spending insurance.
It's worth noting that these policies were only ever sold directly via Amex and were not sold via third parties such as banks and building societies. However, the card protection covered all credit and debit cards, not just Amex cards, and you didn't have to be an existing Amex credit card customer to get it, although Amex says the vast majority of affected customers were.
Am I due a refund?
Amex says ALL customers who ever purchased a My Essentials or Back On Track product with card protection are being refunded, regardless of whether they have since cancelled the product.
If you purchased My Essentials or Back on Track without card protection, you won't get redress.
How much money will I be refunded?
You'll be refunded all of the premiums paid for the card protection element, which cost £3/month, plus interest at 8%.
You won't be refunded the premiums paid for My Essentials and Back on Track.
How will I get the refund?
Non-Amex customers have been sent a cheque in the post with a letter explaining the redress, while current Amex customers will have a credit made to their account within 28 days of Amex sending them a letter about the redress.
I think I'm affected but haven't had a letter yet. What should I do?
Amex says it's contacted all eligible policyholders, including both existing and previous customers. However, if for any reason you believe you're affected and haven't been contacted, call Amex on 01273 675533.
I'm still a customer. Will my policy be cancelled?
If you still have My Essentials, including card protection, Amex says that as part of the letters being sent out it has given 60 days' notice that the card protection element is ending. However, the My Essentials element without card protection will continue, regardless of whether you accept the compensation.
My Essentials with card protection was taken off sale towards the end of 2013. It's currently still on sale without the card protection element.
Back on Track was closed to existing customers in early 2014, so no-one will have this cover any more. It was taken off sale for new customers in 2009.