Experian CreditExpert ID fraud insurance refund

Martin Lewis says...

"I want to explain why we launched this campaign. Experian is a huge credit reference agency. In the old days these firms made their money by selling information to lenders about consumers to help them decide whether to lend to you. You had a legal right (and still do) to access the information via a £2 statutory credit report.

"Then some bright spark had the idea of making money by taking advantage of people's growing interest in their credit scoring. It launched a credit monitoring service, promising to tell you when your status changed, as did its competitor Equifax.

"Back in July 2007 it was priced at £5.99 a month and even then I thought it was expensive as you could get a statutory credit report for just £2.

"Then after a few small price rises, in 2011, it's radically inflated its subscription price, rising to a stonking £14.99 per month, that's £180 per year. I believe this was to take advantage of the fear many people have about not getting a mortgage, or other credit products, which means they will pay anything for a service they think will help.

"In fact, much of what it offers isn't necessary, even the products most people take seriously such as 'find out your credit score' have fundamental flaws. See my beware buying your credit score 60 second guide for more.

"At the same time as the price hike, Experian bundled a 'compulsory' ID fraud insurance expenses add-on to its service - an overblown product offering limited benefit.

"Here I believe Experian slipped up as I think it used the insurance as a negotiating chip to keep its CreditExpert customers. When some people called to cancel the service entirely it said 'we'll cut your price by £5 and we'll only cancel the ID fraud insurance', thereby making the cover effectively a standalone product.

"Companies that sell insurance have a duty to ensure it's suitable and Experian failed to do this. In the months before we launched this guide, the pressure built on Experian.

"Then in the days before we first published this guide in 2014 Experian pulled the policy, replacing it with a non-insurance victims of fraud service for the same price of £14.99 - perhaps noting the writing on the wall. But what about all those people who bought CreditExpert in the past? Some are now getting they're cash back and so that's who we're focusing on.

"Below is a sample letter of the type people have received, while we can't say it will pay out to everyone who complains, it does seem to have adopted a policy of making goodwill payments of £5 a month for each month you had the policy plus 8% interest."

- Martin Lewis, MSE founder & chair