YORK credit card insurer CPP has paid £32 million in compensation to customers who were miss-sold products directly from the firm's Holgate headquarters.

The total cost of the redress scheme, which closed on August 30, to CPP stood as predicted at £69.8 million, made up of £32 million in compensation from claims in respect of direct sales made by the group, as well as associated costs.

The scheme came into effect on January 31 after being sanctioned by the High Court, and followed CPP being fined a record £10.5 million in November 2012 after regulators found it gave misleading and unclear information about credit card and identity theft insurance.

CPP boss Brent Escott has hailed the completion of the scheme as a "significant milestone", however the impact on the business has been "considerable".

The completion of the scheme has seen CPP breach convenants on its loan facilities around an event of default where customer redress response rates leading to a successful claim under the Scheme exceed 40 per cent.

While CPP said claims throughout the Scheme process since February tracked "broadly within expectations", the group confirmed that the response rate as the end of the scheme was around 41.5 per cent.

However in light of the breach CPP has revealed that a waiver has been agreed with the group’s lenders with regard to this aspect of the group’s covenants.

Around seven million people were invited to apply for payouts with the average sum received by claimants standing at around £188.

Following completion of the redress scheme CPP, which employs 550 people in York, says plans restructure the balance sheet "remain essential and options are being evaluated to strengthen the reduced capital position in order to support the Group’s future development".

Mr Escott, group chief executive, said: "The end of the scheme represents a significant milestone for the business.

"Its impact, nonetheless, has been considerable and consequently, the Group’s financial resources and liquidity is significantly reduced.

"Work is progressing to restructure the Group’s balance sheet and to provide a stronger platform from which the business can look forward.”

The mis-selling scandal ran from 2005 to 2011, although only a proportion of the policies sold were arranged directly through CPP.