CPP considering compensation scheme

CREDIT card and mobile phone insurer CPP Group said it is considering a court-backed customer redress scheme, under a plan to pay compensation after the City watchdog’s damaging probe.

By The Newsroom

Published 24th Sep 2012, 07:00 BST

The York-based company, which is still being probed by the Financial Services Authority for mis-selling, said a “scheme of arrangement” is being considered “as a potential vehicle for customer redress”.

CPP has already set aside £25m to repay mis-sold customers, but has warned this could rise further.

The group’s £80m debt facility with Barclays, Royal Bank of Scotland and Santander expires in March 2013, and last month CPP said it was exploring “alternative financing and strategic options”.

A scheme of arrangement is a court-approved process which forms a binding agreement between a company and its creditors over their claims.

In a statement CPP added: “CPP remains committed to achieving an outcome that is acceptable to all stakeholders and which will enable us to progress and provide a greater degree of certainty for the business.”