HSBC fined £6.3m over treatment of customers in financial difficulty

23rd May 2024 12:53

(Sharecast News) - HSBC has been fined nearly £6.3m by the Financial Conduct Authority over its treatment of customers in financial difficulty.

The regulator said on Thursday that it has fined HSBC UK Bank, HSBC Bank and Marks and Spencer Financial Services for failures related to their treatment of customers who were in arrears or experiencing financial difficulty.   

It said that between June 2017 and October 2018, HSBC failed to properly consider people's circumstances when they had missed payments. This meant it did not always do the right affordability assessments when entering arrangements with customers to reduce or clear their arrears.

Sometimes it took disproportionate action when people fell behind with payments, which risked people getting into greater financial difficulty, the FCA said.

In 2018, HSBC identified issues with its handling of customers in financial difficulty and notified the FCA. The bank invested £94m in identifying the issues and putting them right. It also issued redress payments totalling £185m to over 1.5 million customers. 

Therese Chambers, joint executive director of Enforcement and Market Oversight at the FCA, 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."