Jan 20, 2017
HSBC to pay customers £4m over ‘unreasonable’ fees
HSBC is to pay £4m in compensation to thousands of customers who were charged "Unreasonable" fees for debt collection after falling behind on repayments. The Financial Conduct Authority said about 6,700 borrowers could be entitled to redress after the watchdog conducted an in-depth investigation into the lending practices of HFC Bank and John Lewis Financial Services - both owned by HSBC since 2003. HSBC said: "This is a historical issue, dating back to the period between 2003 and 2009. We have revisited the debt collection charge and as a result a small number of HFC and John Lewis Financial Services Limited customers may be due a refund. We will be directly contacting these customers shortly." Wonga, the UK's largest payday lender, was forced to pay £2.6m in redress in 2014 to 45,000 customers for sending them threatening letters from non-existent law firms. The FCA has clamped down on short-term consumer lending in an attempt to stamp out irresponsible lending and a mounting cycle of debt in the UK. The watchdog imposed a series of rules, including a cap on the cost of short-term loans, which it forecast would eradicate all but a handful of payday lenders.
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