CPP future under threat as banks stall on £1bn compensation

The future of troubled credit card insurer CPP is again under threat as banks stall on agreeing a compensation deal, Sky News reports.

A deal that would have seen high street banks and other CPP business partners pay out up to £1bn to CPP customers who had been mis-sold insurance was meant to be signed by the end of May. However, no deal has yet been agreed.

Recent documents released by the insurer said: “The scheme is expected to feature a deadline for customers to submit a claim, following which all of those customers who are within the scope of the scheme and who have not submitted a claim will be prevented from bringing a claim.

“The deadline is expected to fall seven months after the scheme becomes effective, with an additional six-month period being allowed thereafter for customers to bring a claim where they can show that they were subject to exceptional circumstances.”

Insiders said that the big banks were disputing some of the details of the deal put forward by the Financial Conduct Authority and that the scheme may not be in place till next year. The deal has been further complicated by a one pence-per-share take-over bid from Hamish Ogston, which values the company at £1.7m.

The mis-selling scandal has already cost CPP £10.5m in fines, and it was forced to sell its US business to help with renegotiating lending arrangements.