Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

CPP to Pay $53 Million After FSA Misselling Investigation

Nov. 15 (Bloomberg) -- CPP Group Plc, a U.K. company that provides protection against credit-card and identity theft, may have to pay as much as 33.4 million pounds ($53 million) following a probe into sales of its two main products.

CPP agreed to repay customers about 14.5 million pounds and pay a fine of 10.5 million pounds, the U.K. Financial Services Authority said in a statement. The company has estimated the total cost of the settlement will be about 33.4 million pounds, including the fine, redress and investigation costs.

“The FSA found widespread misselling of CPP’s two main U.K. products between January 2005 and March 2011,” the agency said. CPP “failed to treat its customers fairly and did not provide clear information” to clients.

CPP 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.” CPP rose as much as 23.7 percent today in London trading.

The company said in a statement today that the penalty will be paid in installments, starting with a 2 million-pound payment within the next 14 days. The FSA said the York, England-based company settled at an early stage and qualified for a 30 percent discount in the fine amount.

CPP is in talks with banks to replace a credit line expiring in March next year, it said in the statement. The revolving credit facility, a type of loan where money paid back can be borrowed again, totals 80 million pounds, according to data compiled by Bloomberg.

The assets of the division investigated by the regulator can’t be used as security for the company’s debt from April 2013, it said. This will have a “material impact on the group’s ability to raise debt finance,” CPP said in the statement.

To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.