Customers who were mis-sold Card Protection Plan Limited (CPP) card or identity protection insurance products have less than five weeks to submit their compensation claims as the regulator shuts the door on the scandal.
In November 2012, CPP was fined £10.5m (€12.7m, $17m) for widespread mis-selling of its Card Protection and Identity Protection policies and ordered to pay consumer redress.
In August 2013, Financial Conduct Authority (FCA) said it had reached an agreement with the banks to pay out redress to the customers who were sold useless insurance that protected their credit and debit card.
The FCA reminded customers today that compensation claim forms must be received no later than 30 August 2014 and that forms received after this date will not be considered.
"The CPP redress scheme is drawing to a close but there is still time for people who have not claimed to do so. If you believe you were mis-sold one of these CPP protection products but did not get a letter or threw it away, contact the CPP Scheme helpline immediately and check whether you are eligible to claim," said Clive Adamson, director of supervision at the FCA.
"This simple and transparent compensation process means that customers who believe they were mis-sold the product have an opportunity to get their money back with interest, regardless of whether they bought the protection product from a bank, card provider, or CPP."
The two insurance products under scrutiny were sold through CPP. 'Card Protection', which cost around £30 a year and 'Identity Protection', which cost about £80 a year, were both "widely mis-sold by CPP" said the FCA.
Now, around 13 of Britain's banks will spend around £1.3bn to compensate seven million consumers who were mis-sold fraud protection policies on their credit and debit cards.
The redress package works out at an average of £200 in compensation for each customer, which were found to have been mis-sold identity theft insurance through CPP.
Nearly every major bank is involved with the CCP insurance mis-selling, including Barclays, the Royal Bank of Scotland, HSBC, M&S Money, Natwest, and Morgan Stanley
The FCA said that claims forms will be sent to eligible customers during February 2014, and must be returned by 30th August 2014, with the first compensation payments expected to be made from late March 2014.