View more on these topics

HSBC agrees £4m redress scheme after FCA review

HSBC-700x450.jpg

HSBC is to pay around £4m in redress to customers who might have paid an unreasonable debt collection charge through its subsidiaries HFC Bank and John Lewis Financial Services.

The FCA says HSBC voluntarily agreed to set up the redress scheme following a review carried out by the regulator.

Between 2003 and 2009, customers of HFC and John Lewis Financial Services who fell into arrears were referred to the firms’ solicitors who added 16.4 per cent of the balance to the account as a debt collection charge.

The Office of Fair Trading identified the charge as unreasonable in 2010. According to a statement from the FCA, HFC and John Lewis Financial Services stopped adding a debt collection charge in November 2009, and in 2010 reversed the charge from all live accounts.

The FCA said in December 2015 that it would reconsider its decision not to investigate allegations about the conduct of HFC following a complaint to the Complaints Commissioner.

Through a review, the FCA found that around 6,700 customer accounts – most belonging to HFC customers – paid the debt collection charge before 2010 and were potentially entitled to redress.

Those customers will receive redress where they paid more than the “actual and necessary cost” of collecting their debt.

For a small number of customers, the reversal of the debt collection charge in 2010 meant their account was placed in credit which was not returned to the customer. Those customers will be refunded the credit amount.

During its review, the FCA also discovered HFC had miscalculated the interest payable on some customers’ loans. HSBC says around 350 customer accounts were affected by this error and has committed to repaying the overcharged interest to these customers.

The FCA estimates approximately £4m will be paid by HSBC in redress to affected customers. For each group of customers which are due redress, the firm will also pay 8 per cent interest per annum.

An HSBC spokesman said: “This is a historical issue, dating back to the period between 2003 and 2009. We have revisited the debt collection charge and as a result a small number of HFC and John Lewis Financial Services Limited customers may be due a refund. We will be directly contacting these customers shortly.”

Recommended

HSBC-700x450.jpg
1

HSBC execs charged in forex probe

Two HSBC foreign exchange traders have been charged with fraud after making $8m (£6m) in profits and fees by “front running” a $3.5bn foreign exchange trade for a UK listed oil and gas company. A statement from the US Department for Justice says UK citizens Mark Johnson, HSBC global head of forex cash trading, and […]

HSBC-Branch-Building-700x450.jpg

Osborne blocked HSBC prosecution in money laundering probe

The Chancellor George Osborne and the FSA intervened in US investigations that could have seen HSBC prosecuted for money laundering. A US Congressional investigation published yesterday, claims the regulator “hampered the US government’s investigations” and “influenced” the decision not to prosecute Britain’s biggest bank, Sky News reports. The report adds: “George Osborne, Chancellor of the […]

HSBC-Branch-Building-700x450.jpg
1

HSBC to cut over 800 jobs

HSBC is to cut more than 800 jobs as the lender shifts focus to its India, China and Poland business following a major restructuring plan. The cuts will see 840 IT staff affected in London, Sheffield, Leeds and Birmingham. The move forms part of HSBC’s previously announced three-year plan to cut 8,000 jobs in the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Bit of a setback – they`ll just have to add it to their Eurozone relocation costs….

  2. So these unreasonable charges were imposed between 7 and 13 years ago? Mighty wheels grind mighty slow.

  3. First Barclays Bank – Now Hong Kong and Shan Hai Banking Corporation (HSBC) “co operate with the Governments agent – the “regulator” the FCA to agree terms and claim to set up “redress” ( similar to PPI and LloydsTSB – has this been paid yet or swept under the FCA carpet of corruption). It seems the Government is complicit in allowing their Law of ” deferrment “, where corporations agree to pay “redress” in return for a payment to Government by way of a “negotiated Fine” – then get let off to continue to plunder the peoples cash/money /portfolios.
    Of course there is always a place for a corrupted MP in their investment house or board of Bankers EG Gordon Brown – the worst prime minister – before Cameron – and the fifty shades of May

Leave a comment