The Financial Conduct Authority is considering further investigations into whether many thousands of HSBC customers lost money because of “improper practices” at the bank, following a 12-year campaign by a whistleblower.
The regulator had originally decided to take no action in the case, which involved credit card customers being overcharged, but has reversed that decision after the Office of the Complaints Commissioner accused it of mishandling the matter.
A ruling from the body that oversees the FCA stated that it presided over a series of events “bordering on the farcical”, adding that parts of its response were “negligent” and “defensive”, even attempting to shift the blame on to whistleblower Nicholas Wilson.
The former solicitor had written to the regulator claiming that hundreds of thousands of people struggling with credit card payments were overcharged by HFC Bank, a practice which was continued by HSBC when it took the firm over in 2003.
Mr Wilson said there was evidence the FCA had failed to protect consumers adequately and was “colluding with HSBC”. The regulator admitted that charges were “improperly calculated” and in 2010 HSBC agreed to discontinue the practice, but the FCA disputed whether this was unlawful, how many people were affected and what penalties should be imposed
The FCA concluded that no regulatory action was necessary, but it has now agreed to reconsider this decision.
Complaints commissioner Antony Townsend said in his ruling that among the FCA’s many failings, it had “copied and pasted” what was clearly incorrect information supplied by HSBC into a letter sent to Mr Wilson.
Mr Townsend stated that while this was a “very unfortunate error”, he could find no evidence that the regulator had deliberately set out to mislead Mr Wilson.
The whistleblower said this was proof that the regulator was colluding with the bank, something which the FCA denied.
A statement from the regulator confirmed that it will reconsider its decision not to look into allegations made in relation to the debt collection practices of HFC Bank. “The FCA will be issuing an apology to the complainant shortly,” added a spokeswoman.
Mr Townsend also criticised the FCA for failing to properly address Mr Wilson’s complaint, responding to him that “its attempt to shift blame on to you by suggesting you should have referred the matter to the Office of Fair Trading yourself was unacceptable”.
The new inquiry must include “a full analysis of the harm caused by the improper practices, including the number of customers affected and whether, as you allege, there is continuing overcharging”, demanded Mr Townsend.
“Throughout, this matter has been characterised by delay and muddle,” read the OCC’s letter to Mr Wilson.
“It cannot be satisfactory that the action which was eventually taken to investigate your concerns about HFC and HSBC only occurred because of your persistence; that the consideration of your complaint against the regulators was drawn out and badly handled; and that it was only following the lengthy inquiries, resulting from your complaint to me, that the FCA has now concluded it should reconsider its original decision.”
peter.walker@ft.com
