HSBC was just one of the high street banks which were found to have mis sold PPI and one of those also ordered to clear its backlog of complaints. As that deadline is near, word has leaked that the bank has failed to do so and may be in for some legal repercussions from the Financial Services Authority (FSA).
The deadline is midnight 31 Aug, and HSBC is one of six financial institutions that were told to have their complaints resolved no later than this date. However, due to the fact that complaints were held during a court battle, they were unable to work their way through the sheer numbers of them timely.
One of the stipulations was that banks were to notify mis sold PPI customers of the fact that they had been mis sold and also what the settlement would be. Whilst it is rumoured that yet another of the six banks would likewise miss the deadline, that bank would only miss by a very small fraction of their outstanding accounts.
Since the FSA has taken a strong stance in the mis sold PPI matter and has said that they would be inclined to take ‘strong legal action’ if banks did not follow rulings to the letter. I appears to be the hopes of HBSC that their promise to have all PPI matters ‘sorted’ by week’s end will forestall actions by the regulator.
The holdup stems from the fact that six banks chose to hold on PPI claims whilst they appealed the new regulations but after a long, drawn out court battle, were told they must uphold the original ruling. This put HSBC and one other known bank behind the deadline. Although HSBC has sent the letters as ordered, there may have been a problem with the information being incomplete. If they are found in contempt, there may be severe penalties imposed.