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05/12/2011
HSBC Fined £10.5m For 'Mis-Selling'
HSBC has been hit with a record-breaking fine after mis-selling investment products to the elderly.
The financial Services Authority (FSA) has also ordered the HSBC bank to pay nearly £30m to those affected as well as the largest fine, £10.5m, ever issued by the authority.
According to The Telegraph the FSA said that between 2005 and 2010, a subsidiary of the bank, NHFA (previously known as the Nursing Home Fees Agency) advised 2,485 customers to invest in investment bonds, and other asset-based products, to fund long-term care costs.
A review of this has revealed that nearly 90% of these cases were mis-sold.
The Telegraph reported: "In total the amount invested in these products was close to £285m – meaning the average amount invested per customer was about £115,000."
It has now been ruled by the Authority that the advice given was unsuitable, because these products were designed for a more long-term investment (minimum five years). Many of the investors were not expected to live for five years.
The FSA has said that this penalty should be taken as a severe warning that firms much has appropriate measures in place to identify risks.
(LB)
The financial Services Authority (FSA) has also ordered the HSBC bank to pay nearly £30m to those affected as well as the largest fine, £10.5m, ever issued by the authority.
According to The Telegraph the FSA said that between 2005 and 2010, a subsidiary of the bank, NHFA (previously known as the Nursing Home Fees Agency) advised 2,485 customers to invest in investment bonds, and other asset-based products, to fund long-term care costs.
A review of this has revealed that nearly 90% of these cases were mis-sold.
The Telegraph reported: "In total the amount invested in these products was close to £285m – meaning the average amount invested per customer was about £115,000."
It has now been ruled by the Authority that the advice given was unsuitable, because these products were designed for a more long-term investment (minimum five years). Many of the investors were not expected to live for five years.
The FSA has said that this penalty should be taken as a severe warning that firms much has appropriate measures in place to identify risks.
(LB)
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Northern Ireland WeatherToday:After a dry start this morning rain will spread from the northwest across all parts. This afternoon will be dull with some patchy rain and drizzle. Becoming much milder through the afternoon. Maximum temperature 11 °C.Tonight:A cloudy evening and night with a little light rain or drizzle, perhaps some clear periods developing along the east coast. A very mild night everywhere. Minimum temperature 10 °C.
