The Financial Conduct Authority (FCA) has imposed a fine of £6,280,100 on HSBC UK Bank plc, HSBC Bank plc, and Marks and Spencer Financial Services plc (HSBC) for deficiencies in their treatment of customers experiencing financial difficulty.

Customer Treatment Failures

During the period between June 2017 and October 2018, HSBC allegedly failed to adequately consider the circumstances of individuals who had missed payments, leading to shortcomings in affordability assessments when arranging repayment plans for arrears. The bank's actions occasionally resulted in disproportionate measures being taken against customers facing payment difficulties, potentially exacerbating their financial challenges.

The identified failings were attributed to shortcomings in HSBC's policies, procedures, staff training, and an inadequate system for identifying and rectifying instances of unfair customer treatment.

Taking Remedial Action and Settling Case

In response to these issues, HSBC took measures by notifying the FCA of the concerns in 2018 and subsequently investing £94 million in rectifying the identified problems. Additionally, the bank disbursed redress payments totalling £185 million to over 1.5 million affected customers.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight 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.'

Considering HSBC's remediation efforts and redress program, the FCA factored these into the fine imposed on the bank. HSBC also opted to settle the case, thereby qualifying for a 30% discount on the financial penalty, which would have otherwise amounted to £8,971,600.