CPP says FSA probe threatens company's future
LONDON (Reuters) - British credit card insurer CPP said its future was at risk following new demands from the Financial Services Authority (FSA) regulator, which has been scrutinising its business practices for the last year.
CPP, whose products are aimed at victims of identity theft, has been under investigation by the FSA since last March. The regulator says CPP may have overstated the risks of identity theft to customers and not properly explained how its products worked.
The FSA now wants to review more sales and make changes to CPP's renewals process.
"The board of CPP has informed the FSA that its requirements are disproportionate and threaten the viability of the business," CPP Chief Executive Paul Stobart told analysts and investors on a conference call.
The company suffered a blow last week when Barclaycard decided against renewing its contract with it.
Stobart said the continued pressure put its future at stake and CPP's total workforce of 1,969 people at risk.
The FSA said on Monday it had "serious concerns about the manner in which customers were being sold identity theft and card protection policies by the firm."
"The FSA is committed to ensuring consumers are protected and that the firm treats its customers fairly," it added.
CPP said it would suspend its shares due to the uncertainty surrounding the FSA's investigation and delay the publication of its annual results, which were due in March.
The company said it was hopeful of reaching an agreement with the FSA within two weeks, but added that the final outcome of the FSA's probe remained mired in uncertainty.
CPP's shares, which first listed on the stock market in 2010, fell to an all-time low of 96 pence last week after Barclaycard ended its contract with the company.
The company last traded at 103 pence, giving CPP a market capitalisation of around 180 million pounds ($285 million).
(additional reporting by Adveith Nair; Editing by Sophie Walker)
- Tweet this
- Share this
- Digg this
- Hungary plans new tax on Internet traffic, public calls for rally
- ECB cools speculation over bank health checks ahead of results
- Bank of England minutes add to signs rate hike on back burner
- Embarrassed Williams suffers humbling defeat
- No Russia-Ukraine gas deal at EU talks; Moscow queries finances |