HSBC was fined over £6.2 million by the Financial Conduct Authority for failing to treat customers in arrears and financial difficulties. This put about 1.5 million people’s financial futures at risk.
The Financial Conduct Authority stated that between June 2017 and September 2018, the bank failed to consider the circumstances of some customers when they missed payments. The Financial Conduct Authority fined HSBC UK Bank plc, HSBC Bank plc, and Marks & Spencer Financial Services plc £6,280.100.
HSBC did not always conduct the correct affordability assessments when negotiating with individuals to reduce or eliminate their arrears. This was revealed by the regulator. It took sometimes disproportionate actions when people fell behind on payments. This could have led to people being in greater financial difficulties.
According to the FCA, the failures were due to deficiencies in HSBC’s policies, procedures, and training of staff as well as inadequate measures to identify, and then address, instances of unfair treatment of customers.
HSBC notified the FCA in 2018 that it had identified issues with its treatment of customers who were experiencing financial difficulties. The high-street bank invested £94million in identifying and correcting the problems. The bank has also issued redress payments of £185 million total to over 1.5 million customers.
Therese chambers, FCA’s joint executive director for enforcement and market supervision, stated: “People need to be able trust their lenders when they are in financial trouble to treat them fairly. HSBC exposed 1.5 million people to greater financial harm by failing to act. It is to be commended for identifying and fixing the problem. Its cost in doing so should serve as a warning for all lenders to be aware of their customers’ situation so that they don’t make it worse.
When calculating its fine, the watchdog considered HSBC’s remediation and redress program. The bank settled the case, and was entitled to a 30% discount on the financial penalty. Otherwise the fine would have been £8,971,600.
HSBC UK stated: “We are sorry that some customers who were in arrears between 2017 and 2018, did not receive the services they expected from us. The FCA was informed of these issues at the time, and we have resolved all affected customers. Since these issues were brought to light, we have invested in improving our processes. We are happy to have resolved this historic issue with the regulator.
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