HSBC fined £6.2m for unfair treatment of struggling customers
HSBC UK is being fined £6.2million
PA
HSBC has been fined £6.2 million for treating customers in financial difficulties unfairly.
The high street bank sometimes took disproportionate action when people fell behind with payments, putting further pressure on them during a hard time.
The £6.2million penalty adds to the £185million that the bank has already paid out in compensation.
Between June 2017 and October 2018, HSBC failed to properly consider some people’s circumstances when they had missed payments, the FCA said.
They fined HSBC UK Bank plc, HSBC Bank plc and Marks and Spencer Financial Services plc (HSBC) £6,280,100.
HSBC didn't always do the right affordability assessments when entering into arrangements with people to reduce or clear their arrears, the regulator said.
HSBC failed to properly consider some people’s circumstances when they had missed payments,
PA | HSBC UKHSBC's fine was caused by their failures regarding the treatment of customers who were in arrears or experiencing financial difficulty.
The failings were caused by deficiencies in HSBC’s policies and procedures and the training of its staff.
The FCA explained they inadequately failed to identify and address instances of unfair customer treatment.
Therese Chambers, the regulator’s Joint Executive Director of Enforcement and Market Oversight said: “People must be able to trust their lenders to treat them fairly when in financial difficulty. By failing to do so, HSBC put 1.5 million people at risk of greater financial harm."
Chambers said the bank had identified the issue and notified the FCA, which meant they were able to secure a 30 per cent discount in the size of the fine.
Without the discount, the bank would have had to pay £8,971,600.
The bank has invested £94 million in correcting its mistakes, the regulator said.
A HSBC spokesperson said: “We’re sorry that between 2017 and 2018 some customers who fell into arrears did not receive the service they expected from us.
“We reported these issues to the FCA at the time and have fully remediated impacted customers.”
The FCA are pushing to tighten up consumer protection by warning firms that they face tough action if they fail to stick to new its new consumer duty rules.
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HSBC is closing 114 bank branches this year PAThe new guardrails will require companies to ensure they act in the interests of retail customers.
The shift was introduced after the regulator came under criticism for its inaction over a mini-bond scandal that exposed customers to losses on more than $300 million in investments.