Monday, 13 January 2014

Homeserve faces record mis-selling fine

My understanding is that it is a minority of Homeserve's 2.7m customers (at the time of the mis-selling) who might get compensation. That's likely to mean tens of thousands at least, but perhaps not hundreds of thousands.

The payments, or refunds, could amount to hundreds of pounds but are unlikely to be in the thousands. Some customers may have stayed for several years but the Homeserve cover in question cost a few pounds a month.

It appears that the process of contacting the victims of the mis-selling has already started and should be completed by the spring. So, in theory, if you are affected you don't need to do anything - in practice, if you are worried about being missed out you can get in touch with the company or the FCA to make sure you aren't.

The home repairs and insurance company, Homeserve, could end up paying the biggest fine ever imposed on a retail financial firm in the UK.

Homeserve revealed to the stockmarket this morning that it had been put on notice by the financial watchdog, the FCA, that it faced a fine for £34m for mis-selling.

Homeserve had 2.7 million customers when news of the investigation emerged nearly two years ago, but it is unclear how many are affected and how much compensation might be paid.

The company provides emergency repairs and insurance cover for boilers, electrics and plumbing.

It said in a statement that the issues under investigation "relate to historic sales and marketing, controls and governance and complaints handling".

Homeserve can now discuss or challenge the fine if it chooses to, so it's likely to be weeks or months before the full details of the inquiry are published.

Last year, Lloyds Bank was fined £28m for pushing staff to sell customers insurance they didn't need.

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