Record mis-selling fine welcomed by Charity

Age Scotland has welcomed a fine of £10.5 million levied on bank HSBC for mis-selling investment bonds to older people in care, the largest ever retail fine from the Financial Services Authority (FSA). 
HSBC subsidiary, NHFA, advised 2,485 customers  with an average age of 83 to invest in order to fund care costs.  Many had a life expectancy of less than five years, however were sold products for which a minimum five year investment is recommended.  As they started to withdraw from the investments sooner than expected, the combination of withdrawals and charges meant their capital was eaten away more quickly than expected.  The FSA found evidence of mis-selling in 87 per cent of cases. 
HSBC will also pay £29.3m compensation and said it was "profoundly sorry."  The bank said it would contact those affected in the coming weeks to offer compensation.
Tracey McDermott of the FSA said: "HSBC, who owned NHFA, has now recognised the issues and taken steps to do the right thing. They have been given credit for that - but for some customers it will be too late.
"NHFA was trusted by its vulnerable and elderly customers. It breached that trust to sell them unsuitable products. This type of behaviour undermines confidence in the financial services sector."
Age Scotland spokesperson Doug Anthoney said: "We are pleased that HSBC have been held to account for the actions of their subsidiary. 
"With older people's income being depleted across the board, that a company would create a product which had little chance of making a return on older people's investments is appalling.
"At a time of high inflation and rising living costs, banks need to develop products which help older people weather the storm, rather than finding novel ways of making a profit at their expense."Tweet