Around seven million people mis-sold cover for bank and credit cards are set to receive payouts after a £1.3 billion compensation deal was given the green light.

Credit card insurer CPP said customers had overwhelmingly backed the proposed compensation scheme, with 98% voting in favour, which now paves the way for payouts to begin in the spring, subject to High Court approval next week.

CPP and 13 high street banks and card companies - through which the insurance was sold - have agreed to a package that will see affected policyholders receive between £100 and £300 each.

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CPP was fined £10.5 million in November 2012 after regulators found it gave misleading and unclear information about credit card and identity theft insurance. Only a small proportion of the policies sold were arranged directly through CPP.