N Brown Group has uncovered a new exceptional cost of between £35m and £40m for the full year related to flawed insurance.
The group carried out an investigation that found insurance sold on some goods in the period leading up to, and including, 2011, was flawed. Sales of the relevant products stopped in early 2014.
However N Brown added that there may be mitigating actions to reduce the overall net cost and it will not impact underlying operations.
This is an exceptional cost separate from and additional to the £24m N Brown expects to pay out this year to customers over mis-sold financial services. In September the company said it faced costs of up to £9m after it wrongly calculated compensation following complaints from customers in its financial services division. In April the group upped this estimate to between £22m and £24m.