Credit Card Insurer Close To FSA Deal
CPP, one of Britain's biggest credit card protection providers, is poised to reach a settlement with regulators that could safeguard its future.
I understand that CPP is on the verge of announcing that the Financial Services Authority (FSA) has agreed to drop its probe into the company in return for a binding agreement on a multi-million pound compensation pot for customers.
The FSA has been investigating CPP for months over allegations that it mis-sold products such as identity theft cover, potentially to thousands of consumers.
People close to the situation said that a statement confirming the provisional end of the regulator's probe could come as soon as this week.
A binding deal would require commitments from the banks through which CPP policies were sold to stump up hefty compensation bills.
I have learned that some of Britain's major banks are continuing to oppose a settlement on terms recommended by the FSA on the grounds that they would be financially disproportionate to their involvement with CPP.
The credit card insurer disclosed earlier this month that it had received a takeover approach from the American company behind the rival Sentinel brand.
CPP's impending agreement with the regulator follows a string of other mis-selling scandals affecting British banks, including those relating to payment protection insurance and interest rate swaps.
Santander UK, which recently made a substantial provision for misconduct-related payments understood to include CPP, was a major sales channel for its policies.
CPP has put aside tens of millions of pounds for customer compensation, although the final liability of the entire banking industry will be significantly higher.
CPP and the FSA refused to comment.