HSBC has been fined £6.2 million by the Financial Conduct Authority (FCA) for treating customers experiencing financial difficulties.
The FCA found that between June 2017 and October 2018, HSBC failed to consider the circumstances of people who had missed payments properly.
It put around 1.5 million people at risk of greater financial harm.
The FCA fined HSBC UK Bank plc, HSBC Bank plc, and Marks and Spencer Financial Services plc (HSBC) a total of £6,280,100.
The regulator said HSBC did not always conduct the appropriate affordability assessments when entering arrangements to help customers reduce or clear their arrears.
n some cases, HSBC took disproportionate actions against those who fell behind on payments, further exacerbating their financial difficulties.
The FCA attributed these failings to deficiencies in HSBC’s policies and procedures, insufficient staff training, and inadequate measures to identify and address unfair customer treatment.
HSBC identified these issues in 2018 and notified the FCA.
In response, HSBC invested £94 million to identify and rectify the problems, issuing redress payments totaling £185 million to more than 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.”
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The FCA considered HSBC’s remediation and redress efforts when setting the fine.
HSBC also agreed to settle the case, qualifying for a 30 percent discount on the financial penalty, which would have otherwise been £8,971,600.
An HSBC UK spokesperson said: “We’re sorry that between 2017 and 2018 some customers who fell into arrears did not receive the service they expected from us.
“We reported these issues to the FCA at the time and have fully remediated impacted customers.
“We have invested in our processes since these matters came to light and are pleased to have resolved these historic issues with the regulator.”
