HSBC Embroiled in new mis-charging scandal
March 2, 2015
HSBC became embroiled in yet more scandal yesterday, after evidence from whistleblower Nicholas Wilson emerged that one of the bank’s subsidiaries may have defrauded customers with illegitimate charges added on debt collection.
Up to 600,000 Customers of the now defunct Household Finance Corporation (HFC), a wholly owned subsidiary of HSBC bank, received additional charges of hundreds or even thousands of pounds on a variety of financial products.
This included illegitimate and potentially illegally added charges on store credit cards for household names such as Dixons, Currys, Furniture Village, PC World, and B&Q.
Responding to the news, Fionn Travers-Smith, Spokesman for Move Your Money, said:
“It’s common knowledge that the major UK banks have repeatedly been found to have flouted the rules, and even acted illegally in order to enrich themselves and their top members of staff at the expense of ordinary citizens.
But these new revelations suggest that HSBC bank in particular flouted regulation, and have even broken the law, by charging hard up people illegitimate charges on store credit cards.
It is absolutely indefensible that in the same week that HSBC was found to have aided tax evasion for the wealthiest in our society, they would pay bonuses of over €1 million to 330 members of their staff.
Yet these new revelations show that these bonuses are at least partly built on the back of potential fraud, through fleecing unsuspecting individuals with illegitimate fees.
It’s one rule for big banks and their staff, and another for law abiding, tax paying citizens – and it has to stop.”
The charges levied by the HSBC subsidiary had been declared as illegitimate back in 2010 by the Office of Fair Trading.
Despite this, the regulator of financial services at the time, the Financial Services Authority (FSA), failed to act, erroneously claiming that the additional charges were in fact admissible – despite the ruling of the Office of Fair Trading to the contrary.
In a further twist, the successor to the FSA, the Financial Conduct Authority, later admitted that the regulator had responded to complaints on the issue using “the wording provided by HSBC”, rather than investigating the matter itself in full.
“Only last week it was revealed that HMRC has only prosecuted one person out of 1,100 individuals who illegally evaded tax, aided, abetted and encouraged to do so by HSBC bank,” Fionn Travers-Smith continued.
“Yesterday’s claims now suggest that the Financial Conduct Authority has also refused to act on illegal activity by HSBC, ignoring credible evidence of fraud, and instead taking the bank’s statements on the issue as gospel.
Regulators are taking a ‘cut and paste’ approach to oversight of Britain’s broken banking system, whilst government refuses to act in the interests of citizens ripped off by some of the most powerful corporations and individuals in British society – the big 5 banks and their top brass.
It’s no wonder there is so little trust left in banking given that new scandals seem to appear on a daily basis. But there are serious system failures occurring when the actions of regulators and the government call into question their impartiality and competence in regulating one of the most important industries in our society.
With a constant revolving door between big banks’ and regulatory bodies’ executive and board positions, the relationship between the regulators and the regulated better represents an old boys network than the oversight, scrutiny and enforcement required of such a discredited industry.
People are waking up to the fact that not all banks are the same, with 6 of the 8 scandal-hit big bank brands having lost customers since account switching was made easier in September 2013.
With increasing amounts of people taking matters into their own hands and mounting evidence of wrong doing amongst big banks and their regulators, it’s high time serious action was taken to fundamentally address the rotten core of Britain’s financial system.”
Nicholas Wilson himself is preparing a group action to obtain recompense for the bank’s customers affected by the illegal charges, and is crowdfunding to raise £100,000 for legal fees to take out a private prosecution against HSBC and the solicitors involved in the scandal.