Prosecute CPP tycoon Hamish Ogston over mis-selling, urges Labour MP

John Mann labels millionaire ‘arrogant’ and slams ‘weakness of the law’ in the scandal

The tycoon whose company is accused of making millions from mis-sold insurance policies should be prosecuted, a prominent Labour MP said today.

Hamish Ogston, the multi-millionaire former boss of the insurance firm Card Protection Plan, sparked outrage when he dismissed the possibility that the scandal could result in £1.3bn worth of compensation claims as “bollocks”.

John Mann, a member of the Commons Treasury Committee, retorted yesterday: “Consumers and taxpayers will question why this arrogant man had not been prosecuted. Clearly the real ‘bollocks’ is the weakness of the law in dealing with this scandal.”

The Financial Conduct Authority has said that seven million customers who bought or renewed CPP policies over a period of six years are entitled to their money back plus 8 per cent interest, a decision which could cost the companies involved £1.3bn, if all of them put in a claim. But Mr Ogston rubbished the figure, arguing that no compensation scheme attracts a 100 per cent take up. The entrepreneur, who owns a multi-million-pound house near Harrods in Knightsbridge, London, was awarded a CBE in 2011 for “services to business”. He stood down from the CPP board in June, but owns 57 per cent of the firm, which he launched in 1980.

By 2000, his company had 5.5 million customers and controlled 80 per cent of the market. He personally made £150m when he floated it in 2010.

Last year CPP was fined £10.5m for selling insurance against credit-card theft to customers which they did not need because they were already covered by their card companies, and for overstating the risk of identity theft. Their sales pitch was that customers could cover themselves for up to £100,000 worth of losses if a card was stolen by a thief who then used it to go on a spending spree.

In some cases, new customers who had been given a number to ring to activate their card went straight through to a CPP sales operative. What they were not told is that the card providers are obliged to cover their losses, under the banking code.

Since the FCA judgement, the company has been struggling with a falling share price. Shares fell from from 20.3p to around 13p – wiping more than £13m from its stock-market value.

The compensation ruling also covers 13 credit-card providers who directed customers to CPP, with Barclays, HSBC, Santander, RBS and MBNA being the most exposed.

Between January 2005 and March 2011, CPP amassed £845m from customers taking out or renewing card insurance policies. Lenders were paid fees of up to 60 per cent for referring customers to CPP.

The scandal is just the latest of a series to hit the reputations of the high-street banks and major lenders. However, the sum involved is a fraction of the pay-outs from the payment-protection insurance scandal, which have hit £15bn, or the £11bn paid to people wrongly advised to switch from company pension schemes to personal pensions based on stock-market performance.

News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Extras
indybest
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
tv
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
News
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
i100
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
art
News
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Life and Style
Pick of the bunch: Sudi Pigott puts together roasted tomatoes with peppers, aubergines and Labneh cheese for a tomato-inspired vegetarian main dish
food + drink
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape