Shares suspended in CPP as its warns about FSA review

The card and identity protection group CPP has claimed the Financial Services of Authority could put it out of business after the City regulator demanded a massive review of past sales to identify how much mis-selling went on.

It ordered the suspension of trading in its shares yesterday.

CPP has been accused of heavy-handed selling tactics, particularly when it came to describing the potential risks of identity theft.

The regulator said: "The FSA has serious concerns about the manner in which customers were being sold identity theft and card protection policies by the firm. In March 2011 CPP stopped selling identity protection products to new customers and has since also amended its sales scripts for the card protection product.

"Now, as part of the FSA's ongoing investigation, it is likely that the firm will be required to carry out a past business review of the direct sales it made for both products and, if appropriate, pay redress.

"We are in discussions with the firm about the scope of such an exercise."

CPP has 4.5 million UK customers and does not deny that some of its customers were mis-sold either card protection, which costs around £30 a year, or identity protection at £80 a year. The company first said it was under investigation by the FSA in March 2010.

Paul Stobart, the chief executive, said: "The business review which the FSA is calling for is disproportionate. So much so that it threatens the viability of the whole business. That means not just our shareholders but also more than 1,300 who work for us in the UK."

He declined to say what percentage of its 4.5 million customers the FSA had asked it to go back and review.

CPP received a phone call and then a follow-up letter from Georgina Philippou, the head of retail enforcement at the regulator, on Friday evening.

CPP shares were suspended at 103p. Before the FSA investigation was revealed last year they stood at 310p.

Mr Stobart did not deny that mis-selling had taken place in the past.

He said: "We are deeply apologetic to those customers who were mis-sold and will compensate them. We have also acknowledged that a past business review is appropriate, but the scale the FSA has asked for is not appropriate. It would be hugely costly and at the same time the longer this goes on the more difficult it is for our business partners."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific