top of page
  • Writer's pictureuseyourbrainforex

HSBC fined £6.2M for unfair treatment of financially stretched customers!

HSBC fined £6.2M for unfair treatment customers

Banking giant HSBC has been fined 6.2 million pounds ($7.9 million) for failing to treat customers facing financial difficulties fairly, according to an announcement by Britain's Financial Conduct Authority (FCA) on Thursday. This significant penalty highlights the importance of fair treatment of customers, especially those who are financially vulnerable. The FCA's decision underscores its commitment to ensuring that financial institutions adhere to regulatory standards designed to protect consumers from undue financial harm.

The FCA stated that it imposed this penalty on multiple HSBC entities, including HSBC UK Bank Plc, HSBC Bank Plc, and Marks and Spencer Financial Services. The fine was a result of these entities' failure to conduct proper affordability assessments for their customers. Furthermore, the banks were found to have taken disproportionate actions against customers who fell into arrears during the period between 2017 and 2018. These actions often exacerbated the financial difficulties faced by already struggling customers, leading to a greater risk of financial harm.

HSBC alerted the FCA in 2018 after it identified significant issues with how it managed customers who were in arrears or experiencing financial difficulties. Recognizing the seriousness of the problem, HSBC took substantial steps to address these issues. The bank had already compensated 1.5 million customers with a total of 185 million pounds and invested an additional 94 million pounds in enhancing its procedures and staff training. These measures were part of HSBC's efforts to rectify past mistakes and improve its customer service and financial management practices.

Therese Chambers, the FCA's joint head of enforcement, acknowledged that HSBC deserved credit for identifying and addressing the problems. However, she emphasized that the banking industry should take note of the significant costs incurred by HSBC as a result of these issues. Chambers highlighted the broader implications of HSBC's failings, noting that trust in lenders is crucial, especially for customers in financial difficulty. By failing to treat these customers fairly, HSBC put 1.5 million people at risk of greater financial harm, undermining trust in the financial system.

In a statement on Thursday, HSBC issued an apology to its customers, expressing regret over the shortcomings in service experienced by those who fell into arrears between 2017 and 2018. A spokesperson for the bank stated that HSBC had offered full redress to the affected customers, invested in improving its processes, and was pleased to have resolved the historical issues. The spokesperson reiterated HSBC's commitment to providing better service and support to its customers, particularly those facing financial challenges.

The FCA noted that the fine's amount reflected HSBC's proactive response and cooperation, which contributed to a 30% reduction from the original 8.97 million pound penalty. This reduction acknowledges HSBC's efforts to promptly address the issues and improve its practices. The FCA's decision serves as a reminder to other financial institutions of the importance of compliance and the potential consequences of failing to treat customers fairly.



bottom of page