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Bad HSBC

Record retail fine for mis-selling investments to elderly people paying for care

HSBC’s NHFA unit advised nearly 2,500 elderly people to put money for their care into investment bonds whose minimum term was often longer than they could expect to live.

£10.5m fine + ≈£29m compensation

Fined

In December 2011 the FSA fined HSBC £10.5 million over advice given by NHFA, its specialist long-term care advice business. The regulator called it the largest retail fine it had issued.

NHFA advised nearly 2,500 elderly customers to invest in asset-backed products, mainly investment bonds, to fund their long-term care. The products often had a minimum investment term of five years, which was frequently longer than the customers’ life expectancy.

HSBC estimated compensation at about £29 million. HSBC had closed NHFA to new business on 1 July 2011.

The evidence

3 sources
  1. Exhibit AFSA fines HSBC record £10.5m for mis-selling to elderlyInvestment Week · 5 December 2011 · investmentweek.co.uk
  2. Exhibit BHSBC faces £40m payout after inappropriate salesChannel 4 News · 5 December 2011 · channel4.com
  3. Exhibit CRecord mis-selling fine welcomed by charityAge UK Scotland · December 2011 · ageuk.org.uk

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