HSBC unit fined £1m for PPI failings
HSBC owned HFC Bank has been fined a record £1.09m by the Financial Services Authority (FSA) for failing to treat customers fairly when selling Payment Protection Insurance (PPI).
The regulator said that between January 2005 and May 2007, HFC sold PPI with 75pc of the loans that it provided – exposing 163,000 customers to the risk of buying PPI which was unsuitable for the needs.
The regulator said that HFC's 136 branches failed to gather enough information about its customers, and therefore may have been unable to tell if a customer actually needed PPI, which is designed to help borrowers keep up with their payments on loans, credit cards or mortgages, in the event of accident, sickness or unemployment affecting their income.
HFC said "It is disappointing that in certain respects our procedures have been found to fall below the standards expected by the FSA and which we set ourselves.
"A programme of improvements to HFC Bank's procedures is already well under way in order to ensure that the issues identified by the FSA have been addressed and, moreover, work is underway to ensure that customers have not been disadvantaged"
HSBC got a 30pc discount on its fine from £1.55m by settling early.
Source: Telegraph Business 17 Jan 2008
DW Comment
Any policy holder with the above that feels they were mis-sold then they have a green light for a claim. Note the importance of the date the regulator refers to, January 2005.
PPI only came under the FSA jurisdiction in January 2005; therefore any policies sold prior to this date are not covered by the Financial Services Authority, FSA, rules and regulations. This means that these cases cannot be referred to the Financial Ombudsman Service, FOS, for them to investigate your complaint if you have not settled after eight weeks.
If you have a policy prior to this date and feel you have been mis-sold then you may have to go through the Courts to seek a refund of your premiums.
This is a big boy being hit by the FSA and I expect more to follow suit.