A bank has been fined £6.2 million for failures over the treatment of customers who were in arrears or experiencing financial difficulty.
Sometimes HSBC took disproportionate action when people fell behind with their payments, which risked people getting into even more financial difficulty.
In total it put around 1.5 million people at risk of greater financial harm, according to the Financial Conduct Authority (FCA).
Between June 2017 and October 2018, HSBC failed to properly consider some people’s circumstances when they had missed payments, the FCA said.
It fined HSBC UK Bank plc, HSBC Bank plc and Marks and Spencer Financial Services plc (HSBC) £6,280,100.
HSBC did not always do the right affordability assessments when entering arrangements with people to reduce or clear their arrears, the regulator said.
The failings were caused by deficiencies in HSBC’s policies and procedures and the training of its staff, as well as inadequate measures to identify and address instances of unfair customer treatment, according to the FCA.
In 2018, HSBC identified that there were issues with its handling of customers in financial difficulty and notified the FCA.
HSBC said they invested £94 million in identifying the issues and putting them right.
It also issued redress payments totalling £185 million to more than 1.5 million of its 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.”
A statement on the FCA website adds that it has taken HSBC’s remediation and redress programme into account when setting its fine. HSBC also agreed to settle the case and qualified for a 30% discount to the financial penalty imposed, which would otherwise have been £8,971,600.
