A company fined last year for mis-selling credit card protection on behalf of major banks has agreed a number of credit arrangements worth £36 million that will allow it to survive.
CPP said that its partner banks, which include Barclays, RBS and Santander, had agreed to a £13 million funding arrangement that would help it to avoid collapse, saving 725 jobs in the UK
Some of its partners are also to allow the firm to defer large sums of commission worth £23 million for 2013/14 until at least 2017.
The York-based firm was fined £10.5 in November by the Financial Services Authority and ordered to pay at least £14.5 million in compensation to victims of mis-selling practices.
The company sold over 4.4 million credit card insurance policies, of which around 300,000 were sold directly and 4.1 were sold on behalf of banks.
The FSA's investigation concluded that the card protection company "failed to treat its customers fairly" and "did not provide clear information" (read more).
The company has since been working with lenders and regulators to put together a compensation fund for those affected.
It recently set aside over £50 million to cover the costs of the ordeal, but it expects this to rise as the process continues.
The company's chairman, Charles Gregson, said the new arrangements offer the company "a much improved and more stable platform from which to move forward", though CPP concedes that it still faces considerable financial challenges ahead.
James Booker
Which4U
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