Credit card insurer's shares suspended due to FSA action
Credit card insurer CPP suspended its shares yesterday after an FSA request to carry out a past business review of the firm’s card protection and identity protection products.
The FSA has also requested that the firm scraps its automatic annual renewals policy for credit card insurance.
In a statement to the stock market, the firm warns the FSA’s actions are “disproportionate and “threaten the viability of the business”.
The Financial Times reports the FSA is set to impose one of the toughest penalties yet for misselling on the insurer.
The past business review could see CPP pay those who bought the insurance hundreds of millions of pounds in compensation dating back to the company’s inception in 2005.
The firm says: “The FSA has stated its view that some form of customer review exercise will be required. There is no certainty that these discussions will be resolved or what the scope of any review exercise that might be acceptable to both FSA and CPP might be.
These discussions are likely to last no longer than two weeks, says the firm.
A statement from the FSA says: “The FSA has serious concerns about the manner in which customers were being sold identity theft and card protection policies by the firm.”
Shares in CPP were suspended yesterday at 103p, valuing the company at £176m. It was worth £561m last February.