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HSBC whistleblower calls for justification after paying customers $ 200 million for bank charges

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NOTicholas Wilson has spent years suing HSBC over how it treated some people who fell behind in payments, and when he claimed the bank could owe its customers over $ 200 million, it arguably seemed pretty fancy.

For more than a decade he was ignored and fired, but HSBC finally put in place a $ 4 million compensation package to address a historic problem.

Four years later, the 64-year-old whistleblower said he felt justified after it emerged the bank had set aside $ 223 million to pay compensation to customers after an internal review of the the way she treated some people who were in arrears.

This reparation program, which kicked off without fanfare in October, has resulted in large numbers of people receiving checks out of the blue, often for relatively small amounts such as 25 or 50.

However, some HSBC customers have reported receiving much more than that: Martin Lewiss’s website MoneySavingExpert has heard of reimbursements ranging from 245 to over 7,000.

Nicholas Wilson has been suing HSBC for almost 20 years
Nicholas Wilson has been suing HSBC for almost 20 years

HSBC says its compensation package, which was never publicly announced and is nearing completion, has nothing to do with the case Wilson has stubbornly pursued since 2003. This implied that the bank finally agreed to pay compensation to credit card customers who have been affected. with excessive loads more than a decade ago.

But Wilson insists the current redress regime is a direct result of my campaign and says there are many unanswered questions.

When pressed, HSBC revealed that the $ 223 million included a nominal amount tied to costs associated with resolving issues Wilson reported nearly 20 years ago, suggesting the bank could still make payments to these people. .

Wilson is right about the unanswered questions until recently, HSBC has said very little about it all, forcing outlets such as the Guardian program and BBC Radio 4s Money Box to look for what information they can get.

So here’s what we know: according to HSBC, there are two distinct issues, and both involve the payment of compensation to customers. There are the issues Wilson pointed out, which relates to 2003-09, and then there is the last diagram, which spans 2010-19.

The 2003-09 problems

These are people who held credit cards with HFC Bank and John Lewis Financial Services, both now part of HSBC.

Between 2003 and 2009, some customers of these two companies in arrears saw 16.4% of the balance credited to their account as collection costs. Wilson, who lives in Hastings, East Sussex, says he told HFC in 2003 that what he was doing was illegal. In 2010, this flat-rate charge was deemed unreasonable by the Office of Fair Trading.

However, we only know all this because the Financial Conduct Authority (FCA) eventually got involved, and in 2017 the regulator announced that HSBC had agreed to set up a compensation system of 4 million for people who lost due to paying excessive fees. He said the money would be shared among around 6,700 customers.

But the FCA later became convinced more people had lost, so they asked HSBC to reconsider. As a result, in July 2019, the FCA declared that the bank was extend the compensation scheme and wrote to 18,500 other people. At the time, Wilson told the Guardian he believed the total overcharging figure was over 200 million, and while 25,000 people could get the money back, that is far, far away from the actual figure. .

Things have calmed down since then, suggesting the issue has been resolved. But when asked by Guardian Money, HSBC said the compensation scheme was still active, although a spokesperson said it was coming to an end. The bank said the final sum had not changed significantly from the original $ 4 million.

The problems of 2010-19

These are customers of HSBC and its brands, such as First Direct and M&S Bank, who were behind on any type of financial product loan, overdraft, credit card, etc. between 2010 and 2019 and did not enjoy a good customer experience.

The bank says this includes letters sent to customers that were unclear or poorly worded or where people could have benefited from more support.

After an internal review, HSBC began sending checks to affected customers last October, but that process is coming to an end.

It is understood that the majority of checks were between 25 and 100, although some people, a small minority, say the bank received larger checks, apparently to reimburse interest and fees they should not have. pay. MoneySavingExpert revealed how a woman received a check for 25 and then another for 7,210.

But since nothing was publicly announced at the time and the cover letters were sparingly detailed, some people receiving these checks remained either mystified or thought it was a scam. In January of this year, the Guardian Moneys Consumer Champions column ran an article titled We Were Baffled by the Surprise 50 We Received from HSBC, and it now seems likely that this payment was part of the redress plan.

HSBC filled in some of the blanks when it responded to Guardian Money, but it’s still far from clear what went wrong, which prompted the bank to launch this exercise (she said been pressed?) and how many people were affected. But HSBC made it clear that it needed to disclose the 223 million figure to deal with the mess in its most recent accounts, which it did.

HSBC said: We are always striving to do the right thing by our customers. Unfortunately, we have identified a few historical cases of customers in arrears where we have not honored this commitment. When they didn’t receive a good customer experience, we took action and offered a remedy to fix it.

If it turns out that Wilson’s long battle with HSBC played a role in securing the $ 223 million payout, it would be quite David and Goliath’s victory for a lone whistleblower over benefits who is financially backed. by donations from Twitter followers.

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