HSBC fined £6.2m for unfairly treating customers in financial difficulty
HSBC has been slapped with a £6.2m fine by the UK financial regulator over failures in its treatment of customers who were in arrears or experiencing financial difficulty.
The Financial Conduct Authority (FCA) said on Thursday that deficiencies in HSBC’s policies, procedures and staff training meant it sometimes took “disproportionate action” when people fell behind on payments, which risked them entering greater financial difficulty.
HSBC failed to properly consider people’s circumstances when they had missed payments, meaning it did not always do the right affordability assessments when entering arrangements with customers to reduce or clear their arrears, the FCA said.
It added that HSBC had “inadequate measures” to identify and deal with cases of unfair customer treatment.
The fine, originally priced at £8.97m, was reduced by 30 per cent as HSBC agreed to settle the case and took action to resolve the issue.
The FCA’s penalty relates to failings between June 2017 and October 2018. In 2018, the bank identified issues with its handling of customers in financial difficulty and notified the regulator.
HSBC invested £94m in identifying and correcting the issues, as well as issuing redress payments totalling £185m to more than 1.5m customers, the FCA said.
An HSBC UK spokesperson commented: “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.
“We have invested in our processes since these matters came to light and are pleased to have resolved these historic issues with the regulator.”
Therese Chambers, enforcement co-head at the FCA, said: “People must be able to trust their lenders to treat them fairly when in financial difficulty. By failing to do so, HSBC put 1.5m people at risk of greater financial harm.
“It deserves credit for identifying the issue and putting it right. The cost it has incurred in doing so, however, should be a warning to all lenders that they need to understand their customers’ circumstances so as not to make a bad situation worse.”