Wednesday, August 4

Why has HSBC really paid 100,000s people £100s in compensation? And could it owe even more?

We don’t know exactly how many people are affected by this; we’re guessing it’s 100,000s as we’ve had so much feedback on it. Yet HSBC won’t tell us, so we could be wrong, and HSBC not telling us is a theme you’ll see throughout this article. Sometimes though, silence can be as telling as answers.

We first revealed in December 2020 that some people who’d been in arrears between 2010 and May 2019 on various financial products, including mortgages, overdrafts, credit cards and loans, had received cheques out of the blue for between £25 and £100, which some had almost binned thinking it was a scam, and some have since had payouts of up to £7,000.

Details on why people are receiving payments and how these have been calculated have been scant, with both HSBC and the financial regulator – which has told us it’s aware of the redress scheme – remaining tight-lipped. But without these details concerns have been raised by a former whistleblower, Nicholas Wilson, that people could be missing out. HSBC disputes this, saying it’s contacting everyone affected.

Mr Wilson has doggedly campaigned for years on behalf of customers of HFC Bank and John Lewis Financial Services Ltd, some of whom between 2003 and 2009 were charged a 16.4%’debt collection charge’. (Both HFC Bank and John Lewis Financial Services Ltd are now owned by HSBC.)

In 2010, the Office of Fair Trading ruled that these fees were unreasonable and did not reflect the actual cost of collecting the debt. In 2017, HSBC set aside £4 million to repay affected customers, and in 2019, following Mr Wilson’s campaigning, it conducted a further review to contact customers newly identified as having been impacted. HSBC has explicitly denied its current redress scheme is linked to this scheme, or to the 16.4% debt collection charge.

We put a series of questions to HSBC, some kindly suggested by Mr Wilson, to try and find out more. Here are its answers (in some cases where we had to ask follow-ups, we’ve collected its answers on each question into one, and we’ve also provided some context where helpful)…

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