CPP's ‘misleading’ Identity Theft insurance
Posted in 'Identity Theft' by Richard Catlin
21 February 2012
The troubled insurance and identity protection provider CPP has warned that it faces disappearing completely unless the Financial Services Authority (FSA) shows some leniency in its investigation into heavy-handed selling techniques employed by the firm.
Shares in CPP were suspended following the announcement this week that it must carry out a full review of past business practices and compensate any customers who were mis-sold identity or card protection policies. CPP has around 4.5m customers, but has not revealed how many of those might be part of the review.
This latest FSA announcement is just the latest setback for CPP. It was forced to stop selling identity protection products in March 2011, a year after the FSA investigation first began - a move which saw the share price tumble. It was also revealed recently that Barclaycard would no longer be offering CPP products to its customers.
CPP does not deny that some customers were mis-sold policies, but says that the scale of business review the FSA is asking for is inappropriate and could threaten the future viability of the company, which employs over 1,300 people in the UK alone.
The focus of the FSA investigation is whether customers were sold policies believing that they would pay out cash in the event of their identity being compromised – rather than covering the ‘administrative costs’ associated with getting everything back to normal.
Most bank customers are covered against losses from financial fraud in any case, but it’s fair to say that the time, effort and stress involved in resolving a case can require a helping hand.
Indeed, despite the controversy and bad press surrounding the FSA investigation, there’s no denying that identity fraud is a very real and distressing crime. The number of confirmed fraud victims is growing at a worrying rate, with the latest figures from CIFAS – the UK’s fraud prevention organisation – showing that there were over 113,000 cases in 2011, up 10% on the previous year.
If you are at all worried about ID theft, our handbook Identity Theft – Prevention and Victim Assistance gives you advice on staying safe, and extensive resources if you are unlucky enough to fall victim, including template letters, contact details and easy-to-understand advice. If you have a compatible device can get it from Amazon for just 77p.
Alternatively, there’s the free Identity Theft Check Service on checkmyfile, which will instantly highlight any area of your lifestyle that might put you at increased risk of having your identity stolen – together with hints and advice on protecting yourself.
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