An ID theft protection provider attempts a restructuring to fund compensation claims potentially worth tens of millions of pounds.

One of Britain’s biggest identity theft protection providers is at the centre of an impasse between its creditors and the City regulator over a plan to compensate the victims of another consumer mis-selling scandal. I have learned that CPP Group, a major insurance company, is attempting to assemble a restructuring through a process known as a scheme of arrangement that would enable the company to meet compensation claims likely to run to tens of millions of pounds. The Financial Services Authority (FSA) is attempting to wrestle a consortium of major banks, including HSBC and Royal Bank of Scotland, into agreeing a financial package that would enable CPP to provide redress to customers who were allegedly mis-sold its products.

The scheme of arrangement would be a court mechanism to resolve the negotiations between CPP and the banks by ring-fencing a pot of money set aside for compensation. It is one of the options at an advanced stage of consideration by CPP. People familiar with the discussions say, however, that some of the banks are resisting the FSA’s efforts to corral them into a settlement, arguing that the contributions they are being asked to make are disproportionate to their role in selling CPP products....Read more here: Exclusive: CPP Rescue Forces Banks' Hand