CPP Group Plc, a U.K. company that provides protection against credit-card and identity theft, said it plans to sell non-insured identity protection in place of an offering it suspended following a regulatory probe in March.
The York, U.K.-based company, which stopped selling insured some identity protection after talks with the Financial Regulatory Authority, is marketing a new product with similar features that is outside the purvey of the regulator, the company said. It provides customers web tools to detect identity fraud and offers case worker services. Unlike the previous product, it does not offer insurance for expenses incurred.
“We’re in advanced conversations with our business partners about selling it,” Chief Financial Officer Shaun Parker said in a phone interview, “They are reticent to sell the product whilst the FSA investigation is still going on.” It wasn’t clear when the probe would be concluded, he said.
CPP Group shares slumped 46 percent to a record low in March after the company suspended sales of insured identity protection in the U.K., as the FSA probe covered “alleged failings in sales calls with customers,” the company said then. CPP has lost 57 percent of its market value this year.
The suspended insured protection offering, one of its main products, will be scrapped completely, only renewing existing customers, Parker said. The company is hopeful business partners will sell the non-insured identity protection product in its place after the probe is concluded, he said. It will continue to sell card protection, also currently under investigation.
Shares rose 10 percent to close at 1305 pence at 4:30 p.m. in London, giving the company a market value of 223.7 million pounds ($356 million).
CPP’s operating profit margin in the year to date fell 0.9 percent in the year to 13.8 percent from a year earlier, the company said in a statement today. Fourth-quarter revenue and margins in Northern Europe, which accounts for 70 percent of the group’s sales, will be affected by the product suspension, Parker said in an analyst conference call today.