CPP shares plunge on FSA investigation

CPP Group

Last Updated at 30 Jul 2014, 04:06 ET *Chart shows local time CPP Group intraday chart
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Shares in CPP have plunged almost 50% after the card protection company said it was being investigated by the Financial Services Authority (FSA).

The York-based group said the FSA was looking into "alleged failings in sales calls" for its UK card protection and identity theft protection products.

As a result, it said it was suspending sales of its identity theft products, which would hit profits this year.

The FTSE 250-listed company says it has 10 million customers worldwide.

In a statement released on Monday evening, CPP said that it contested "a number" of the concerns raised by the FSA.

The company said it planned to redesign its identity protection products to remove its insurance component and begin selling them again in about six weeks' time.

Consumer group Which? questioned how the company had managed to sign up so many customers.

"ID theft insurance is a product that most people will never use yet hundreds of thousands of policies have been sold, which raises serious questions about the sales practices being employed," said the group's chief executive Peter Vicary-Smith.

"We wrote to the FSA last year asking it to investigate ID theft insurance sales after several of our members contacted us with concerns about how it was sold to them."

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