CPP sheds three executives

Three senior executives were shed yesterday by card protection insurer CPP as it prepares to cut hundreds of jobs over the coming months in a radical restructuring exercise.

The York-based business, which lost its chief executive, finance director and managing director, said it was now operating on a much reduced scale following a crisis triggered by fines for mis-selling.

The firm is facing substantial compensation payouts and is unable to sell many products.

CPP is currently the subject of a takeover bid from Hamish Ogston, its founder and a majority shareholder, who has offered 1p a share to take the company into private ownership by 31 May. The firm was floated by Ogston in February 2010 at 235p.

Outgoing chief executive Paul Stobart yesterday pledged to stand down once CPP is “on a firm footing for the future”, possibly after the takeover completes.

The company’s total sales are down 25% in 2013 to date.

The FSA fined £10.5m CPP in November last year by for miss-selling insurance products and agreed to pay £14.5m to compensate customers.

The fine was the biggest fine imposed by the FSA and the total bill  faced by CPP for the mis-selling scandal was £33.4m.

The FSA found widespread mis-selling on CPP’s two main UK products between January 2005 and March 2011.

The mis-selling activities included emphasising that customers would benefit from up to £100,000 of insurance cover that would have been already covered by their banks and  overstating the risks and consequences of identity theft.