A part of banking group HSBC called HFC were fined £1m over failings from PPI (payment protection insurance).
HFC Bank is the UK side of US loan company Household International which HSBC bought out in 2003. In 2008 it had 1.5 million customers who often had poor credit ratings; offering secured and unsecured loans throughout its 136 UK branches. Throughout January 2005 to May 2007 the bank sold 163,000 PPI policies under its trading names of Beneficial Finance and Household Bank. This figure represented 75% of the total loans it provided.
The financial Services Authority (FSA) advised that HFC failed to ensure its customers received correct advice between January 2005 and May 2007. Failing to have adequate systems and controls in place that put their customers at an unacceptable risk of being mis-sold PPI. HFC Bank co-operated with the FSA and so qualified for a 30% discount on their fine. Without the discount to total fine would have been over £1.5m.
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