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Jobs at risk after CPP loses RBS contract
TROUBLED York employer CPP is to make redundancies after it lost a major contract.
RBS confirmed that it would not be renewing the group's contract to provide mobile phone insurance from March, which CPP said was expected.
The loss follows other contract losses triggered by a 20-month investigation into mis-selling, by the Financial Services Authority (FSA).
T-Mobile decided not to renew its mobile phone insurance with CPP in October and Barclaycard also decided not to renew contracts to provide card and identity protection last year.
About 50 staff at CPP in York, who worked on the RBS contract, are now in consultation over their jobs. The consultation could lead to redundancy or redeployment as the business reorganises to become a more customer-focussed business.
Most of the staff working on the RBS contract however, were based in CPP's Chesterfield office, which will now close. Its employees may be transferred to a new company carrying out the RBS contract under TUPE laws, and some may be redeployed to York.
The business, which provides card and identity protection and mobile phone insurance, said: "As previously indicated, the combination of the expected increase in FSA-associated costs, the anticipated decline of the UK business as a result of the restrictions imposed by the FSA, and lost business due to the decision by RBS not to renew its contract will have a substantial adverse impact on the business in 2013 and beyond."
It said it continued to make progress adjusting its UK business and reducing its cost base after revenues had been hit from a decline in new business. The business still has 200 business partners globally and is working mainly on renewals and servicing existing customers.
Hugh Bayley, MP for York Central, said: "This is sad news. There are bound to be short-term employment consequences but I believe CPP is fundamentally strong and will win new business as the economy strengthens.
"I have worked with the company in the past and will do all I can to help the company to find new contracts and protect jobs."
The company was ordered to pay a record fine of £10.5 million by the FSA and other costs, including compensation to customers, will take the total to about £33.4 million.