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August 22, 2013 9:05 pm
The company at the centre of the UK financial services industry’s latest mis-selling scandal still operates in 15 countries,despite a regulatory crackdown.
Regulators have curtailed the activities of CPP in its home market after finding that up to 7m individuals may have been mis-sold protection it offered for identity theft and credit card fraud.
However, CPP has not been completely prevented from operating in the UK – it still offers access to private departure lounges, for example, under its so-called Airport Angel scheme.
The bulk of the York-based group’s new business comes from “life assistance” policies sold overseas, from France and Spain to India and China, through a network of financial institutions.
In spite of its international expansion, CPP warned on Thursday that there was “significant doubt” about its ability to “continue as a going concern”.
This is partly because the company cannot be certain how much it will have to pay out in compensation to UK consumers.
CPP was founded by the entrepreneur Hamish Ogston, who made about £120m from its stock market launch three years ago. Its market value has tumbled from about £400m at the listing to just £26m on Thursday.
CPP’s status as a business service provider, in effect, a go-between, helps explain why the company itself has set aside only about £50m to cover customer redress.
The group’s business partners, banks and credit card issuers, will cover most of the expected £1.3bn compensation bill.
This article has been amended to clarify CPP’s role in the insurance sector.
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