The Financial Conduct Authority (FCA) has imposed a fine of £6,280,100 on HSBC Bank and Marks and Spencer Financial Services (HSBC) over its treatment of customers in arrears on loan repayments.
HSBC To Pay Hefty FCA Fine Over Treatment Of Customers
According to the UK’s financial watchdog, the bank did not “properly consider” the circumstances of people when they missed debt repayments between June 2017 and October 2018. This implies that HSBC did not correctly perform “affordability assessments” when devising plans to reduce or clear arrears.
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The regulator indicated that in some instances, HSBC’s repayment schemes were not realistically aligned with what customers could afford and consequently increased the financial burdens of these people. According to the FCA, gaps in HSBC policies caused this situation. It further said that the bank did not have proper measures in place to “identify and address instances of unfair customer treatment”.
HSBC identified these problems in 2018 and notified the FCA. The financial institution reportedly invested £94m to investigate and address these issues. It also made redress payments totally £185m to more than 1.5 million customers. The FCA’s joint executive director of enforcement and market oversight, Therese Chambers, 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. 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.
