Credit card protection policy firm CPP has suspended trading in its shares and attacked the FSA, saying that the whole future of its business is at risk because of prolonged action by the watchdog.
The warning comes almost a year after CPP announced that it had turned over a staggering £325.8m in its first year as a public company, with profits of £48.7m.
The company offers protection against lost mobile phones, wallets, keys and credit cards, as well as identify theft.
But that was shortly before the FSA stepped in to investigate, following concerns raised by Which? that ID theft insurance for card-holders is a product most people will never use, even though hundreds of thousands of policies had been sold. The firm pulled sales of its ID products, and said it would launch replacement products once the inquiry was over.
In December, the York-based company warned that its profits would be hit by the ongoing FSA investigation.
Over the weekend, the FSA asked CPP to review past business sales and make changes to the way it renews policies.
CPP agreed a review was necessary but said the FSA’s demands were ‘disproportionate and threaten the viability of the business’.
In a statement, CPP said: “The board has been, and remains, absolutely committed to working closely and cooperatively with the FSA to resolve its issues.
“At the same time, it has frequently emphasised the potential threat to CPP, a business which employs 1,341 people in the UK and 1,969 people in 16 countries worldwide, of prolonged discussions.”
The two sides are to hold further discussions on what steps to take next, but CPP warned: “It is likely that any agreed outcome will have a significant adverse financial impact on the group.”
Comments