THE immediate threat to one of York’s largest employers has been resolved after CPP reached an agreement with the Financial Services Authority.

The business, which employs about 1,000 people in York, said the agreement on how to address certain failings in its sales processes was a positive development, which removed the immediate threat to its viability.

The card protection provider 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 and changes to its renewals scheme, saying the proposals would make it unviable as a business.

Shaun Parker, chief financial officer of CPP, said: “We’re very pleased with the progress we have made with the FSA and have been very impressed by the fact that the FSA have put a lot of time and resources into reaching an agreement.”

He said that while the immediate threat to CPP’s viability was no longer there, the company’s shares remain suspended while it continued talks with its banks and business partners. Stakeholders were concerned by Monday’s announcement and were seeking reassurances as to its financial position.

He said: “Our staff feel more reassured by the situation, although they do know there are some steps we have to go through.”

CPP will write to customers who bought its card and identity protection products directly from the company, explaining more clearly what the products do and do not cover. Customers who believe they bought the product on the basis of a misunderstanding will be able to ask the company for a refund.

Under the process, supervised by the FSA, the original sales calls will be reviewed to verify that the sale was made on a misunderstanding.

The company, which recorded pre-tax profit of £23 million in 2011, has estimated the review and compensation could cost it between £10 million and £15 million, which Mr Parker said they believed was affordable.

The company has also negotiated over changes to its renewals process. The FSA had wanted the company to replace automatic renewals with an opt-in, but CPP successfully argued that automatic renewals were standard in the insurance industry.

The company will make it clearer that the policy can be renewed and restate what the product does and does not cover, and will extend the cooling-off period from 14 days to 60 days.

Before the negotiations were completed, CPP employees wrote to the FSA , inviting it to visit York to witness how customer-focused staff were and to get an understanding of the impact their decision could have.

They said: “We feel that stating that you believe we are mis-selling on a large scale is an attack on our integrity as people, and what we are trying to do on a daily basis for our customers.”