The Financial Conduct Authority (FCA) has fined
HomeServe Membership Limited (HomeServe)
£30,647,400 for breaching several of the FCA's Principles
of Business. The FCA states its final notice that
HomeServe's failings were "serious, systemic and long
running".
The FCA found HomeServe, an insurance intermediary, to be in breach
of:
- principle 3, due to its failure to take reasonable care to organise and control its affairs responsibly and effectively and with adequate risk management systems;
- principle 6, by failing to pay due regard to its customers' interests and treat them fairly with regard to complaints handling; and
- principle 7, by failing to pay due regard to the need to communicate information to customers clearly, fairly and without misleading.
The FCA stated that HomeServe mis-sold insurance policies and
subsequently failed to investigate customer complaints. The
financial services regulator raised specific concerns that
HomeServe's failings were a systemic problem, arising from
inadequate training and remuneration structures that incentivised
staff behaviours that were potentially contrary to customer
interests.
The penalty, which is the FCA's largest ever retail conduct
fine, would have been higher still, had HomeServe not qualified for
a 30% discount for early settlement. The intermediary is expected
to have to pay an additional total of £16,800,000 in respect
of customer redress.
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