Villains of 2011: Part 7
HSBC suffered an ignominious end to the year with a record-breaking £10.5m fine, the largest fine the FSA has ever issued in the retail sector. Its care fee adviser, Nursing Home Fees Agency (NHFA), paid numerous UK charities and care advice websites for customer leads so its advisers could boost their commission by selling investments. Age UK admitted it had made money by passing customer details to the now defunct advice firm.
HSBC was fined after an FSA investigation found 2,485 people were mis-sold investments by NHFA. The FSA said "a sample of [NHFA] customer files found unsuitable sales had been made to 87% of customers".The disgraced firm targeted the old, where the average customer age was 83, and sold asset-backed investments to fund long-term care. These products are usually recommended for a minimum period of five years but in many cases this exceeded the life expectancy of the elderly client. Some products only paid out after the customer had died.
In addition to the fine, HSBC expects to be hit by a further £29.3m payout in compensation to customers duped by NHFA. HSBC closed the business in July 2011. After NHFA, Southern Cross, and the pension crisis, 2011 may make the baby-boomer generation ponder TS Eliot's fateful lines in The Love Song of J. Alfred Prufrock: "I have seen the eternal Footman hold my coat, and snicker/And in short, I was afraid."