Home emergency repairs company Homeserve has been fined £30.6 million for mis-selling and poor complaints handling.
The fine, confirmed by the Financial Conduct Authority (FCA) on Thursday, is the largest retail penalty ever issued by the regulator.
It comes after the FCA found Homeserve failed to address a pay structure which encouraged staff to sell products that customers did not need.
It was also ruled that Homeserve’s customer service team were encouraged to close complaints as quickly as possible, often without appropriately redressing customers.
Homeserve failed vulnerable customers
The FCA concluded that these failings were particularly serious because a significant proportion of Homeserve’s customers were of retirement age and therefore potentially more vulnerable.
After the fine was issued, FCA director of enforcement and financial crime Tracy McDermott urged firms to ensure their sales teams focused on quality not quantity.
She said: ‘Firms must put the interests of customers at the heart of their business if we are to restore trust and confidence in financial services.
‘True change in the culture within the financial services industry will only be achieved when firms and their management accept and deliver on their responsibility to ensure that customers are treated fairly.’
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Homeserve customers to receive compensation
Homeserve has been contacting customers who are due compensation because of these failings.
Customers can also a special helpline – 0800 121 6866 – to check whether they have been sold an appropriate policy.
The company could have been fined more, but qualified for a 30% discount by accepting the penalty at an early stage of the investigation, saving itself more than £13 million.
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