HSBC is facing a penalty of $8.6 million imposed by the City watchdog for its mishandling of customers facing financial challenges, according to BBC.
The Financial Conduct Authority (FCA) revealed that HSBC neglected to consider the circumstances of customers who missed repayments or took disproportionate actions. This lack of consideration reportedly endangered 1.5 million individuals, according to the FCA.
FCA on HSBC's Failure
The FCA also mentioned that between June 2017 and October 2018, HSBC failed to assess the affordability of repayments and took disproportionate actions when customers fell behind. Therese Chambers, the FCA's joint executive director, emphasized the importance of customers trusting their lenders to treat them fairly, condemning HSBC for putting 1.5 million individuals at greater financial risk.
The bank responded and stated that they are working on the processes that have come to light but have already resolved the issues with the regulator.
HSBC disclosed that it invested $130 million to address the issue and compensated affected customers with a total of $240 million. While the FCA could have imposed a higher fine of $11.8 million, it considered HSBC's efforts to remedy the situation and agreed to settle the case.
This issue follows the sudden resignation of former CEO Noel Quinn after five years in the role, per VCPost. Quinn was not mentioned as aware of the issue.
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