FCA has fined HSBC UK Bank plc, HSBC Bank plc, and Marks and Spencer Financial Services plc £6.2801 million for failing to properly handle customers who were in arrears or experiencing financial difficulties.

Between June 2017 and October 2018, HSBC failed to adequately consider customers' circumstances when they fell behind on repayments. The bank did not always conduct appropriate affordability assessments when arranging for customers to reduce or repay their debts. In some cases, HSBC took disproportionate actions against customers in arrears, potentially worsening their financial situations.

These failings were due to defects in HSBC's policies and procedures, inadequate staff training, and insufficient measures for identifying and addressing instances of unfair customer treatment.

In 2018, HSBC identified issues in handling customers in financial distress and reported these to the FCA. HSBC invested £94 million to identify and rectify the problems. Additionally, HSBC paid £185 million in compensation to over 1.5 million customers.

The FCA took HSBC's remediation and compensation plan into account when setting the fine. HSBC also agreed to settle the case, qualifying for a 30% discount on the penalty, which would have been £8.9716 million without the discount.