HSBC to compensate shoppers it overcharged for debt
Shoppers who bought goods on credit but were then overcharged when they fell behind on payments will be compensated, HSBC has announced.
The bank, which referred its borrowers’ debts to solicitors, said it will reimburse 6700 customers who were charged an “unreasonable” amount between 2003 and 2009.
The Financial Conduct Authority (FCA) projected that each customer will receive on average £600 each.
“Those customers will receive redress where they paid more than the actual and necessary cost of collecting their debt. HSBC has agreed their methodology for calculating the actual and necessary cost with the FCA,” the regulator said.
The Office of Fair Trading (OFT) found that when these customers fell behind on payments, they were charged 16.4 per cent of their outstanding balances as a debt collection fee. In 2010, it ruled that such a charge was unreasonable.
The finance was provided by HFC and John Lewis Financial Services, both owned by HSBC.
HSBC said it will contact customers directly in the coming months.
“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,” said a spokesman.