CPP, one of the UK’s largest providers of insurance against identity theft, could be in financial trouble themselves after an FSA investigation was launched into the company’s past sales.
The Financial Services Authority had already asked CPP to make some changes to its procedures, particularly its renewals process, but now the company has applied to suspend the listing of its shares on the London Stock Exchange.
Bosses at CPP are claiming the FSA has forced them into this action, alleging that while a review of the company’s business practices is appropriate, the over-eager response by the financial authorities has made it difficult to continue doing business. The FSA’s statement to CPP clients said that the company was reviewing its past sales and that some customers could even be entitled to a refund.
CPP employs over 3,000 people in the UK and around the world and is one of the largest providers of insurance against both card and identity thefts. The firm has already face done FSA investigation, in 2011, for misusing its card activation service to sell identity theft insurance.
Many High Street banks used CPP’s card activation service for their credit and debit cards, but when customers called the number on their new card, believing they were contacting their bank, CPP would try to sell them insurance against identity theft. Many banks, including Royal Bank of Scotland and Barclays, have since stopped using CPP for card activation.
Identity theft insurance is an unnecessary expense, as victims are entitled to claim back all of their losses from their own bank, provided they were not negligent with their personal information or bank details.
Nevertheless, CPP and similar companies have managed to convince hundreds of thousands of customers that they need this kind of insurance. Consumers who think they may have been mis-sold identity theft insurance should cancel the policy and ask for a refund, reporting the provider to the Financial Ombudsman if they refuse.