NOTIcholas Wilson has spent years suing HSBC over how it treats some late-paying people, and when he said the bank could owe customers over £ 200million it arguably sounded pretty fancy.
For more than a decade he was ignored and sacked, but HSBC finally put in place a £ 4million 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 £ 223million to compensate customers after an internal review of how which she treated some people in arrears of payment.
This reparation scheme, which got off the ground 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 Lewis’s MoneySavingExpert website has heard of refunds ranging from £ 245 to over £ 7,000.
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 remedy regime is “a direct result of my campaign,” and says there are many unanswered questions.
When pressed, HSBC revealed that the £ 223million included a ‘nominal amount’ linked to the costs associated with resolving the issues Wilson reported almost 20 years ago – suggesting the bank could still carry out payments to these people.
Wilson is right about the unanswered questions – until recently HSBC has said very little about any of this, forcing outlets such as the Guardian’s Money Box program and BBC Radio 4 to look for what information they can get.
Here is 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 added 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 of this because the Financial Conduct Authority (FCA) eventually got involved, and in 2017 the regulator announced that HSBC had agreed to set up a £ 4million compensation scheme for people who lost because of 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 excessive fee figure was over £ 200million, and while “25,000 people can get the money back, that’s a long way off, very far from the real 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 “has not changed significantly” from the original £ 4million.
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 benefit from 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 cost between £ 25 and £ 100, although some people – a small minority, according to the bank – received larger checks, apparently to reimburse interest and fees they would not have. had to pay. MoneySavingExpert revealed how a woman received a check for £ 25 and then another for £ 7,210.
But because nothing was publicly announced at the time and the cover letters were sparingly detailed, some people receiving these checks remained mystified or thought it was a scam. In January of this year, Guardian Money’s Consumer Champions column featured an article titled ‘We Are Baffled by the £ 50 Surprise We Got From HSBC’, and it now seems likely that this payment was part of the redress program.
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 overall figure of £ 223million 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 for which we have not honored this commitment. When they did not receive a good customer experience, we took action and offered repairs to address it. “
If it turns out that Wilson’s long battle with HSBC played a role in the £ 223million payout, it would be all David and Goliath’s victory for a lone whistleblower on benefits who is financially backed by the donations from Twitter followers.