10:10pm Monday 28th March 2011
By Julie Hayes »Business reporter
ONE of York’s largest employers has issued a profit warning after revealing it is being investigated by the Financial Services Authority (FSA).
CPP Group, which employs about 1,000 people in York, said in a statement to the London Stock Exchange that the FSA was looking into issues surrounding the sale of its card and identity protection products in the UK, specifically looking at alleged failings in sales calls.
It said it contested a number of the concerns raised by the FSA, but it may need to conduct a review in order to identify whether any deficiency has caused customer detriment requiring redress.
It has decided to suspend all new sales of identity protection through telephone sales and it intends to develop an identity protection product without insurance.
It said: “CPP is committed to running its business with the highest levels of integrity and treating its customers fairly. We have confidence in our processes and our agents are measured against demanding standards of regulatory compliance, all undergoing rigorous FSA compliant training before they take a live call.”
But the company, based at Holgate Park, has warned that 2011 operating profit was expected to be below the lower end of the current range of analysts’ estimates for 2011, because of the suspension of identity protection sales and income from the new non-insurance product being deferred.
“The group expects to be able to mitigate to some extent the financial impact through sales of alternate products, including card protection. The net impact however is that underlying operating profit is expected to be below the lower end of the current range of analysts’ estimates for 2011,” it said.
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