HSBC to compensate customers over solicitor charges
HSBC has voluntarily agreed to compensate customers who had bought goods on credit, but were overcharged by the bank when they missed payments.
A total of £4m will be given back to customers charged between 2003 and 2009, with the charges being deemed “unreasonable.”
At the time, the funds were provided to shoppers by two separate firms, John Lewis Financial Services and HFC, both of which are now owned by the HSBC banking group.
According to the Financial Conduct Authority (FCA), only a minority of customers were actually customers of John Lewis, and the vast majority of those affected would have been shopping at a large number of other retailers.
Once these customers fell behind with their repayments, they were charged around 16 per cent of their outstanding balance as a ‘debt collection’ fee.
In 2010 this was decided to be an unreasonable level for the charge by the Office of Fair Trading (OFT), and since this verdict the FCA has set about calculation how many people would be due compensation. It is believed that each person will, on average, receive around £600.
All customers affected by this decision will be contacted directly by HSBC.