The UK’s Financial Conduct Authority (FCA) has fined HSBC UK Bank plc, HSBC Bank plc and Marks and Spencer Financial Services plc £6,280,100 for failing to treat customers who were in arrears or experiencing financial difficulties.
Between June 2017 and October 2018, HSBC failed to properly look into people’s circumstances when they had missed payments. This meant he didn’t always make the right affordability assessments when he made deals with people to reduce or clear their arrears. Sometimes disproportionate action was needed when people fell behind on payments, putting people at risk of greater financial hardship.
The failures were caused by deficiencies in HSBC’s policies and procedures and in the training of its staff, as well as inadequate measures to detect and deal with instances of unfair customer treatment.
In 2018, HSBC identified problems with its handling of customers experiencing financial difficulties and notified the FCA. HSBC invested £94 million to identify the issues and fix them. HSBC also issued compensation totaling £185 million to more than 1.5 million customers.
The FCA took HSBC’s rehabilitation and remediation program into account when setting the fine. HSBC has also agreed to settle the case and is eligible for a 30% discount on the financial penalty imposed, which would otherwise have been £8,971,600.