HSBC has been fined £6.2 million by the UK Financial Conduct Authority (FCA) for failing to properly support customers in arrears or financial difficulties.
The financial watchdog highlighted that deficiencies in HSBC's policies, procedures and staff training led to “disproportionate action” against defaulters, exacerbating their financial problems.
Between June 2017 and October 2018, HSBC did not adequately take into account customers' individual circumstances, resulting in inappropriate affordability assessments when negotiating payment arrangements. The FCA noted that HSBC lacked adequate measures to identify and address instances of unfair treatment.
The fine was initially set at £8.97 million, and was reduced by 30% as HSBC accepted the settlement and took corrective action. These issues came to light in 2018 when HSBC itself identified the issues and reported them to the Financial Conduct Authority.
HSBC invested £94 million in correcting the issues and provided £185 million in compensation payments to more than 1.5 million affected customers. A spokesperson for HSBC in the UK said: “We regret that between 2017 and 2018 some customers who were late with payments did not receive the service they expected from us. We reported these issues to the FCA at the time and have fully addressed the affected customers. We have invested We have been in our operations since these matters came to light and we are pleased to be able to resolve these historical issues with the regulator.
Therese Chambers, Co-Head of Enforcement at the FCA, stressed the importance of fair treatment of customers in financial difficulties: “People should be able to trust their lenders to treat them fairly when they encounter financial difficulties. By failing to do so, HSBC exposes 1.5 million people at risk of greater financial harm. It deserves credit for identifying the problem and putting it right. However, the cost incurred in doing so should serve as a warning to all lenders that they need to understand their customers' circumstances so as not to exacerbate the situation. bad.
This penalty underscores the urgent need for banks to implement robust systems to support customers facing financial difficulties and to ensure that such issues are addressed quickly and effectively.