BARCLAYCARD has stopped selling CPP’s identity protection when new card-holders confirm receipt of their card, until the Financial Services Authority (FSA) completes its review of the York-based business.

CPP, which employs about 1,000 people in York, said the cancelled sales represent less than 2 per cent of its revenue.

Barclaycard has stopped selling the product in the “call to confirm” channel, which is similar to the “card activation” channel, when CPP salespeople recommend card protection and identity protection to new card-holders calling to confirm receipt of their credit card or to activate it.

CPP said in a statement to the stock exchange today the impact on underlying operating profit in 2011 and 2012 would be “immaterial”.

But it said reduced sales in 2011 and 2012 would have an adverse impact on the profitability beyond 2012 because of the resulting decrease in renewals revenues, on which CPP pays a smaller commission to its business partners.

“The group has more than 200 business partners and has been encouraged by the support received in connection to the ongoing discussions with the FSA. CPP remains actively engaged with its business partners and is working with them to respond appropriately to the current situation,” it said.

It said sales suspended by business partners other than Barclaycard have so far been at levels which are “not material to the group”.

CPP will continue to sell card protection to Barclaycard customers who currently hold the identity protection product and who call the group’s customer service department. Barclaycard will also continue to offer identity protection and card protection to its customers in all their existing channels.

CPP said in March that the FSA had raised concerns that it was exaggerating the need for identity theft and that there could be confusion over what was covered by the element of insurance in its identity theft product.

CPP has rejected the claims, but has cancelled telephone sales of the identity protection product with insurance and is developing an alternative product without insurance.