FSA has fined Card Protection Plan (CPP) £10.5 million for widespread mis-selling of its two main products over a six-year period from January 2005, when FSA took over regulation of general insurance. FSA found CPP:
- in selling its card protection product, emphasised that customers would benefit from cover they did not need as their banks already provided it; and
- in selling its identity protection product, overstated the risks and consequences of identity theft.
FSA found failings in all sales channels through a process that focused on sales, revenue and commercial objectives. FSA found CPP achieved these aims at the expense of treating customers fairly. It also found CPP had failed to take action to address FSA's concerns. CPP has stopped sales of new products and has stopped trying to dissuade customers who call to cancel policies from doing so. It has undertaken a redress exercise and thinks it will pay around £14.5 million to affected customers. Separately, FSA has published a notice of undertaking from CPP to change certain terms in its products which FSA considered unfair under the Unfair Terms in Consumer Contracts Regulations. (Source: Final Notice – Card Protection Plan Limited and Notice of Undertaking)