HSBC to pay out millions in fines and compensation
UK BANKING giant HSBC is set to pay out £40m (€47m) in fines and compensation after one of its subsidiaries sold savings products to elderly customers who were likely to die before the recommended investment period was up, the City regulator said today.
The Financial Services Authority (FSA) has issued its biggest ever retail fine of £10.5m to HSBC after NHFA "inappropriately" advised 2,485 customers to invest in "unsuitable" investment bonds between 2005 and 2010. The FSA estimates NHFA customers will be paid a total of £29.5m in compensation.
In a number of cases, the individual's life expectancy was below the recommended five-year investment period and as a result customers with shorter life expectancies had to make withdrawals from their investments sooner than recommended.
The products were sold to elderly individuals entering, or already in, long-term care and in many cases these elderly customers were reliant on the investments to pay for their care.
HSBC has apologised for what happened at NHFA, which closed for new business in July, and reassured affected customers that they would be contacted within weeks.