HSBC fined £10.5million, which is nice

5 December 2011

HSBCHSBC has been kicked square in the nuts with a fine of £10.5m fine by the Financial Services Authority for selling unsuitable products to almost 2,500 elderly people.

That's the largest penalty EVER doled out by the FSA for this type of breach.

Reports say that HSBC's NHFA subsidiary will also have to fork out £29.3m in compensation for the way it advised elderly customers to buy investment bonds. In many cases, instead of being something that was to be something of a nest-egg for their care, the five-year investment period for the bonds was longer than the individual customer's life expectancy. The average age of the conned customer was 83.

The scale of the problem prompted Brian Robertson, chief executive of the UK arm of HSBC, to say he was "profoundly sorry". He added: "I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged."

The FSA said that "customers with shorter life expectancies had to make withdrawals from these investments sooner than is recommended" and reduced the capital faster than might have been the case if proper advice had been given. A review of a sample of customer files found unsuitable sales had been made to 87% of customers.

Tracey McDermott said of the NHFA: "It breached that trust to sell them unsuitable products. This type of behaviour undermines confidence in the financial services sector. HSBC, who owned NHFA, has now recognised the issues and taken steps to do the right thing. They have been given credit for that – but for some customers it will be too late.

"This penalty should serve as a warning to firms that they must have the right systems and controls in place to manage and identify risks when they acquire new businesses. A failure to do so can lead not only to detriment to their customers but to significant reputational and regulatory cost."

TOPICS:   Investments   Banking   Government   Economy

8 comments

  • shaz
    Who gets the £10.5Million?
  • Dick
    And who gets the compensation? No doubt some of them are already dead, since judgements like this take years. And if it gets passed on to their estate and heirs, then they are of an age where the investments make more sense, so hsbc will probably claim that the compensation no longer stands. Bankers and all that.
  • Mike H.
    Pennies to HSBC. iPhone toting, BMW/Audi driving cunts!
  • Clarkson
    I would have them all shot.
  • oliverreed
    @Clarkson - I sense this could be a (long) ongoing them - please continue
  • Raggedy
    @Clarkson - Jeez the average age was 83! Let them pass away naturally.
  • The B.
    My mum's started taking legal advice about HSBC's probate service as they've just pretty much ignored every single written instruction she'd given them since day 1. They've cashed in £50k's worth of savings bonds, paid a tax bill which was being disputed, etc, etc. Frankly HSBC are a shower a shit by the sounds of it, not surprising S & P downgraded them.
  • Michael M.
    WILL THIS BE THE NEXT SCANDAL for HSBC PLC? To the Chairman of HSBC PLC (Mr. Flint) will this be the next scandal for HSBC PLC? Is it true that the FSA is investigating you for giving false and misleading information to shareholders at this year’s AGM about complaints in India? Help Stop Bankers Cheating? This fine is an obscene joke? If the FSA wanted to make an example of HSBC, START THE FINE AT £100 MILLION (they can afford to pay this amount) . FSA acting director of enforcement and financial crime Tracey McDermott says: This type of behaviour undermines confidence in the financial services sector. Yet in the next breath: HSBC, who owned NHFA, has now recognised the issues and taken steps to do the right thing. They have been given credit for that (IS THIS ANOTER OBSCENE JOKE?). The fine is £ 10.5 million yet the FSA give HSBC a discount of 30%, HSBC HAS TO PAY £ 7.4 million? IS THIS THE REAL JOKE? Is a fine from the FSA like a parking ticket, pay up fast and we will give you a discount? Why not say if you do not pay in ten days, we will charge you INTEREST per day. The Chairman (Mr. Flint) states “maintaining our reputation and our integrity” “Everything we do is governed by the imperative of upholding HSBC’s corporate reputation and character at the highest level” (IS THIS ANOTER OBSCENE JOKE?). HSBC chief executive Brian Robertson says: This should not have happened and I am profoundly sorry that it did. We have high values here at HSBC and this runs contrary to everything that we stand for (IS THIS ANOTER OBSCENE JOKE?). What about the USA and INDIA (ask them of your HIGH Values) What about the last time the FSA fined HSBC? What will HSBC HAVE TO PAY IN THE USA, for what they have been doing there? The Chairman (Mr. Flint) calls it a number of weaknesses. What a CHAIRMAN you are Mr Flint? What about HSBC PLC’s REPUTATION and INTEGRITY? Should not the CHAIRMAN of HSBC PLC MAKE THE APOLOGY? Mr. Flint will you call THIS an INVIDIOUS IRRATITION? REMEMBER THE AGM Mr. Flint.

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