CPP has reached an agreement with the Financial Services Authority (FSA) on how to address certain failings in its sales processes.
The card protection provider, which suspended its shares on the London Stock Exchange on Monday after the FSA recommended a review of past business sales of its card protection and identity products, said the agreement was a “positive development”.
It said: “The resolution of these issues allows CPP to renew its focus on evolving towards a more customer centric business.”
However, CPP's shares remain suspended while the business speaks to its stakeholders, including its banks and business partners, as to the ultimate impact on the business of the FSA's investigation, it said.
The business has in principle agreed with the FSA to undertake a past business review whereby CPP will contact customers whom it approached directly to purchase the products.
It has estimated the review and potential compensation payments may cost it £10 million to £15 million.
CPP has also agreed to work with the FSA to implement changes to its renewals process, in order to highlight more clearly to customers that they have the right not to renew the product, and to explain clearly to the customer the advantages and limitations of the product.
It has also agreed not to pay a dividend to shareholders for the year ending December 31, 2011.
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