FSA fines two UK firms in major TCF crackdown
LOSSES & LAWSUITS
LONDON - HFC Bank has been fined £1.085 million for mis-selling payment protection insurance (PPI) by the UK's Financial Services Authority (FSA).
For two years HFC - a subsidiary of HSBC - sold PPI to 163,000 customers but failed to provide suitable advice, or put adequate systems and controls in place. The firm did not require its advisers to gather enough information on customers' financial circumstances, explain fully why they recommended a sale, or identify to customers any demands and needs that the policy would not meet.
Taking out PPI - designed to protect against unemployment or illness - is the most lucrative form of UK insurance. It can add costs of £3,000 to a £7,500 loan. The bank joins 11 other firms fined for mis-selling PPI, including GE Capital Bank, which was fined £610,000, and Capital One Bank, which was fined £175,000.
Meanwhile, stockbroker Square Mile was fined £250,000 for using persistent high-pressure sales tactics and misleading information to sell consumers shares they did not want or could not afford. The firm deals in derivatives and securities sold on the Alternative Investment Market and PLUS markets, which provide primary and secondary trading services for smaller capitalised and emerging companies. Examples of the firm's sales tactics included telephoning one customer 17 times in 10 days, and selling almost £300,000 of high-risk securities to an 89-year-old customer without permission. The penalties to HFC and Square Mile mark a significant increase in enforcement of the principles of the FSA's Treating Customers Fairly (TCF) initiative.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Banks will not be frowned upon for discount window borrowing – Fed official
Risk Live: more banks have completed paperwork to access Fed lending facility than a year ago
Capital One puts OCC’s tough stance on mergers to the test
Proposed Discover deal should be approved but will go under the microscope, ex-regulators say
As FCMs dwindle, regulators fear systemic risk
Panellists highlight dangers of clearing membership becoming more concentrated
EU banks fear green asset ratios paint an unfair picture
Industry lobbyist clashes with lawmaker over usefulness of new sustainability disclosure
EU watchdogs to launch prop trader capital review in April
Prop traders say bank-style IFR rules are driving them out, but doubt EBA will suggest changes
Investors say new SEC disclosures may sit on shelf
Advisory committee questions value of rule 605 changes, even for retail investors
CFTC hears ‘call to action’ from swaps end-users on Basel III
Commissioner Pham mulls engaging with prudential regulators over capital hit on clearing
Iosco gears up for ‘intensive work’ on AI regulation
Watchdogs risk ‘falling behind the curve’, secretary-general warns; FSB also working on guidance
Most read
- As FCMs dwindle, regulators fear systemic risk
- Options market still searching for cause of the Vix plunge
- Top 10 op risks: AI fears drive cyber risk to record high