The FCA has fined HSBC, HSBC Bank and Marks and Spencer Financial Services (HSBC) £6.2m for their inadequate treatment of customers facing financial difficulty.
Between June 2017 and October 2018, HSBC neglected to consider customers’ circumstances appropriately when they missed payments, leading to flawed affordability assessments for arrangements to reduce or clear arrears.
This oversight resulted in disproportionate actions being taken against customers falling behind on payments, exacerbating their financial challenges.
The deficiencies in HSBC’s policies, procedures, and staff training, coupled with insufficient measures to identify and rectify instances of unfair treatment, were identified as the root causes of these failings. Despite discovering these issues in 2018, HSBC demonstrated proactive accountability by investing £94 million to rectify the situation and issued redress payments totaling £185 million to over 1.5 million affected customers.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, emphasized the importance of lenders treating customers fairly, particularly when they encounter financial difficulties. Chambers acknowledged HSBC’s efforts in identifying and addressing the issue but underscored the significant financial harm inflicted on 1.5 million customers due to HSBC’s actions.
The FCA took HSBC’s remediation and redress programme into account when determining the fine, offering a 30% discount on the financial penalty, which would otherwise have amounted to £8,971,600. This settlement underscores the regulatory authority’s commitment to ensuring financial institutions uphold fair treatment standards for their customers.
Keep up with all the latest FinTech news here
Copyright © 2024 FinTech Global
Copyright © 2018 RegTech Analyst
