Business
Discussions with FSA
Discussions with FSA.
About this update from Cpp Group Plc
[{"type":"text","content":"\n \nRNS Number : 7736D CPPGroup Plc 28 March 2011 \n \n\nCPPGroup Plc\nDiscussions with FSA\nCPPGroup Plc (\"CPP\" or \"the Group\") announces that it is in discussions with the FSA in relation to certain issues surrounding the sale of the Group's Card Protection and Identity Protection products. The FSA's investigation only relates to such of the Group's products as are sold into the UK, and specifically to alleged failings in sales calls with customers. The Group may need to conduct a review in order to identify whether any deficiency has caused customer detriment requiring redress. \nIn relation specifically to CPP's Identity Protection products in the UK and notwithstanding the fact that the Group contests a number of the concerns raised by the FSA, the Group has decided to suspend all new sales of Identity Protection with immediate effect in CPP's own voice channels. The Group's Identity Protection products comprise a package of life assistance customer benefits including caseworker support to re-instate identity, online access to credit reports including email or SMS alerts and a parameterised internet search facility with associated email alerts. The pure insurance component of such products, which is the component that makes the product subject to FSA supervision, is comparatively small. As such, CPP intends to develop and design a non-insurance Identity Protection product, which it believes will remain an attractive offering for its customers. Sales of the redesigned product are expected to commence in around six weeks time.\nThe new Identity Protection product will be a service product, and as such revenues will be deferred over the one year term of the product. This contrasts with the revenue recognition of the existing insurance product where a large proportion of the price is accounted for as an introductory fee related to making insurance arrangements and is therefore recognised when the product is sold. This change, which has no material impact on the cash or value received by the Group, does result in lower revenue and profit recognition in the year for the same level of sales. The financial impact of both the suspension of sales of the insured Identity Protection product in the UK and the deferral of income is likely to reduce the earnings for the...