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CPP warns of "substantial adverse impact" after losing RBS contract
TROUBLED employer CPP has been dealt another blow as RBS confirmed it would not renew its contract with the business.
The business, which provides card and identity protection and mobile phone insurance, warned recent events would have a substantial adverse impact on the business in 2013 and beyond.
The bank confirmed that it would not be renewing the group's contract from March 2013 for the provision of mobile phone insurance in the UK, which CPP described as "expected".
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.
In a statement to the stock exchange CPP, which employs about 1,000 people, mainly in York, 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 important progress adjusting its UK business and reducing its cost base to mitigate some of the adverse profit impact from lower revenue.
The FSA investigation found “widespread mis-selling” at the business and ordered CPP to pay a £10.5 million fine over the next two years.
Other costs, including compensation to customers, are expected to bring the total amount to £33.4 million.