4 Dec 2015 12:55pm

FCA to revisit HSBC fraud allegations

The Financial Conduct Authority (FCA) will re-examine its decision not to investigate HSBC over fraud and has been urged to apologise for its “serial failings” over its handling of complaints

The decision from the FCA follows an investigation by the Complaints Commission (CC) over the regulator’s dealing with allegations of fraud against HSBC and its subsidiary HFC.

Commissioner Antony Townsend reported that the FCA had “some concerns about the basis upon which the […] decision to take no further action was taken” adding that the FCA would “revisit the decision on whether it should undertake further work” relating to HFC’s debt collection practices.

Townsend said the FCA’s response to a number of complaints and allegations from Nicholas Wilson – a HSBC whistleblower and anti-corruption campaigner – had “failed to address the core issues of [his] complaints” over the bank’s behaviour.

In a 10-page letter, Townsend blasted the FCA’s handling of Wilson’s complaints and allegations as “bordering on the farcical”.

The CC found that the financial regulator failed to properly address the core issues of Wilson’s complaint, had underplayed errors and had attempted to shift blame on to the complainant as to how the case was handled.

“The FCA should be transparent and, where it has made mistakes, freely admit it,” Townsend said. “In this case, the FCA’s defensiveness is wholly unsatisfactory.

“The failures in handling [the complaints] against HFC and HSBC and [subsequent] complaints against the regulators, were serious. Throughout, this matter has been characterised by delay and muddle.”

He added that it “could not be right” that action was only taken due to Wilson’s persistence, and recommended that the FCA offer a full apology “for its serial failings”.

Wilson, who has three decades of experience in consumer credit law, initially contacted the Financial Services Authority (FSA) to raise concerns about the conduct of HSBC and its subsidiary HFC in 2012.

He alleged to the FSA that practices of levying a charge on arrears’ recovery costs – taken as a percentage of the sum to be recovered and not the actual cost of the recovery – was unlawful.

Wilson has consistently accused regulators at the FSA, FCA and also the Office of Fair Trading (OFT) of taking insufficient action. In his letter to Wilson, Townsend admits the FCA failed to refer the matter to the OFT, despite agreeing to do so. This failure only to came to light five months later, when Wilson submitted a Freedom of Information Request.

Speaking to economia, Wilson said, “This means everything to me. There is a real public interest in this case and this letter is a major step forward.”

A spokesperson from the FCA declined to comment. HSBC was approached for comment, but has yet to respond.

Oliver Griffin


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