HSBC fined for mis-selling to elderly
London - The Financial Services Authority (FSA) regulator fined HSBC £10.5m for mis-selling products to elderly customers.
The FSA said in a statement that HSBC's NHFA subsidiary had given "inappropriate investment advice" to elderly customers, and added that the British bank had estimated it would have to pay a further £29.3m in compensation to them.
The FSA said the advice and sales given were unsuitable because in several cases the life expectancy of the individual was below the recommended five-year investment period.
"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," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.
"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," she said.
The real tragedy is that one can no longer rely on a spade being called a spade. Those poor people weren't "miss-sold" - they were defrauded - it's that simple. But the truth isn't simple any more ... finance houses have too much political clout to be accountable for their actions.
i have said previously that the financial advice industry can be compared to the taxi industry. Catch Them While You Can is a good catch phrase for the industry.