20th Jan 2017 10:22
LONDON (Alliance News) - HSBC Holdings PLC has agreed to set up a redress scheme for customers over historic unreasonable debt collection charges, said the UK's Financial Conduct Authority on Friday.
The FCA said the GBP4.0 million redress scheme is for customers of HFC Bank Ltd and John Lewis Financial Services Ltd, both now part of HSBC.
Between 2003 and 2009 customers of HFS and JLFC were charged a 16.4% debt collection charge if referred to the companies' solicitors for falling into arrears. The flat rate charge was identified as unreasonable by the Officer of Fair Trading in 2010 and subsequently investigated by the FCA.
Approximately 6,700 customers paid the charge and are potentially entitled to redress, where they paid more than the actual cost of collecting their debt, said the FCA. HSBC will contact all the affected customers and offer redress, said the financial regulator.
Shares in HSBC were down 0.3% at 677.40 pence Friday.
By Adam Clark; [email protected]
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