A £1.3 billion compensation package for seven million people missold card insurance policies by card insurer CPP group was dismissed as "b*llocks" and a "ridiculous figure" by the firm's founder.
Hamish Ogston, who made an estimated £120 million after floating CPP group on the stock market in 2010, launched a fierce tirade at the compensation payout for consumers who had bought his firm's card insurance and identity theft protection policies.
Asked about the £1.3 billion compensation fund, Ogston dismissed it as "b*llocks", a "ridiculous figure".
“There’s never been a compensation redress scheme in history where it’s been 100% [success rate]," the businessman said, who had been awarded a CBE for his services to business by Princess Anne in 2011.
Ogston accused the Financial Conduct AUthority of "sensationalism, by quoting a huge 100% rate".
The Financial Conduct Authority announced on Thursday that the compensation scheme would have the support of over a dozen high street banks and credit card firms as they referred customers on to CPP products so "must share responsibility for putting things right."
Banks including Barclays, HSBC, and RBS have already signed up the scheme, which involves the mis-selling of 23 million policies. CPP has already been fined £10.5m over the scandal.
The financial regulator said that card protection policies, which cost around £30 a year, and identity protection, which cost about £80 a year, were "widely mis-sold" by York-based CPP. The FCA said that CPP "greatly exaggerated" the risks of identity theft and tried to offer cover of up to £100,000 for cards even though they were already covered by their banks.
Ogston admitted that the furore over CPP's mis-sold policies had made him look "a bit of a chump". After founding the firm in 1980, Ogston still controls 57% of the business, although the share price collapsed by 36% to 16p once the compensation scheme was unveiled.
FCA CEO Martin Wheatley said: “We believe this will be a good outcome for customers who may have been mis-sold the card and identity protection policies.”