HSBC Holdings was fined £6.3 millions (S$10.8 million) for failing to fairly look after more than 1.5 million UK customers experiencing financial hardship – a penalty that adds to the £185 million that the bank has already paid out in compensation.
HSBC was hit with the fine by the Financial Conduct Authority (FCA) for failing to show fair treatment to customers for over a year through October 2018. Some of the measures offered to retail customers with mortgages, loans and credit cards were inappropriate or disproportionate, the FCA said on Thursday (May 23).
“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,” said Therese Chambers, the regulator’s Joint Executive Director of Enforcement and Market Oversight.
Chambers said the bank had identified the issue and notified the FCA, qualifying for a 30 per cent discount in the size of the fine. The bank has invested £94 million in correcting its mistakes, the regulator said.
“We’re sorry that between 2017 and 2018 some customers who fell into arrears did not receive the service they expected from us,” HSBC said.
“We reported these issues to the FCA at the time and have fully remediated impacted customers.”
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The FCA has recently made a push 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.
The 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 US$300 million in investments. BLOOMBERG
