FCA set to investigate HSBC amid claims of ‘improper practices’
Complaints commissioner forces inquiry at regulator, accusing it of mishandling reports of credit card overcharging
The City regulator is set to launch an investigation into whether large numbers of people lost out financially because of “improper practices” at HSBC, after a 12-year campaign by a whistleblower.
The Financial Conduct Authority (FCA) had originally decided to take no action in the case, which involves credit card customers being overcharged, but has reversed that decision after its complaints watchdog accused it of mishandling the matter.
In a strongly worded 10-page ruling, the Office of the Complaints Commissioner, which investigates grievances relating to the regulator, said the FCA had presided over a series of events “bordering on the farcical”, was “negligent” and “defensive”, and had even attempted to “shift [the] blame” on to the whistleblower, Nicholas Wilson.
The case concerns claims by Wilson that hundreds of thousands of people struggling with their credit card payments were overcharged by HFC Bank – and later HSBC, after it acquired HFC in 2003 – as a result of the way fees were added to the customers’ accounts.
Wilson also claimed there was evidence the FCA had failed to protect consumers adequately and was “colluding with HSBC” on this matter.
There is no argument about the fact that these charges were “improperly calculated” and in 2010 the bank agreed to discontinue the practice. But there is a dispute about whether this was unlawful, how many people were affected and what action, if any, should have been taken against HSBC.
In his ruling, Antony Townsend, the complaints commissioner, said the paperwork showed that in four cases consumers had been significantly overcharged and given refunds, but that Wilson claimed there were “many more disadvantaged clients”.
Wilson continued to campaign on the issue, but the FCA concluded that regulatory action was not necessary. It has now agreed to reconsider this decision.
Among the FCA’s many failings, said Townsend, was that it “copied and pasted” what was clearly incorrect information supplied by HSBC into a letter sent to Wilson.
The whistleblower said this was proof the regulator was colluding with the bank, but the FCA has denied this allegation. Townsend said although the copying and pasting was a “very unfortunate error” by the FCA, he could find no evidence that the regulator had deliberately set out to mislead Wilson.
Townsend said the FCA had failed to properly address Wilson’s complaint, and told him that “its attempt to shift blame on to you by suggesting you should have referred the matter to the Office of Fair Trading yourself was unacceptable”.
Townsend told Wilson it was essential that the new inquiry included “a full analysis of the harm caused by the improper practices, including the number of customers affected and whether, as you allege, there is continuing overcharging”.
“The failures in the handling both of your original complaint against HFC and HSBC and then your complaints against the regulators were serious,” he added.
“Throughout, this matter has been characterised by delay and muddle. It cannot be satisfactory that the action which was eventually taken to investigate your concerns about HFC and HSBC only occurred because of your persistence; that the consideration of your complaint against the regulators was drawn out and badly handled; and that it was only following the lengthy inquiries, resulting from your complaint to me, that the FCA has now concluded it should reconsider its original decision. For all these matters, I recommend that the FCA offers a full apology for its serial failings.”
Wilson, who lives in East Sussex and used to work for a firm of solicitors, welcomed the ruling.
“It still doesn’t mean they are going to take action, but at least it’s out in the open now, and they can’t bury it,” he said.
He claimed he reported what was happening to the bank 12 years ago and had subsequently “lost everything” – he is unemployed, on benefits and his home may be repossessed.
The FCA said: “Following the complaints commissioner decision, the Financial Conduct Authority can confirm that it will reconsider its decision not to look into allegations made in relation to the debt collection practices of HFC Bank Limited. The FCA will be issuing an apology to the complainant shortly.”
HSBC said: “We will cooperate fully with any requests from the FCA on this matter.”
Source: The guardian – FCA set to investigate HSBC amid claims of ‘improper practices’
