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How are the banks reacting to mis-selling?

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Since 2010 the high street banks have been hitting the headlines for mis-selling investment products to their customers. Most of them have apologised, promised to make changes and paid out a hefty amount in fines and compensation, but investments are still being mis-sold to unsuspecting customers.

As leading compensation claims specialists, we’re keeping track of the way the banks are reacting to the ongoing mis-selling scandal. This is the first part of the series – we’ve put together a collection of reactions from the past to get you up-to-speed on the current state of things.


In 2011 HSBC were fined £10.5m and paid £29.3m in compensation for mis-selling investment bonds to elderly people in care. The bonds, sold under subsidiary NHFA, were deemed to be unsuitable for 87% of the customers who bought them.

Brian Robertson, chief executive of HSBC, said: “I fully accept that NHFA failed to give suitable financial advice to some of their customers. This should not have happened and I am profoundly sorry that it did.”

Then, in 2013, FCA shopping survey revealed that as many as 200,000 people had been mis-sold investments yet again. HSBC promised to spend £93m to review investment advice given to their customers during the period of August 2008 to October 2012.

The bank refused to disclose the exact value of the products they were reviewing.

Read more about HSBC investment mis-selling.


Santander were among the banks most heavily criticised (and fined) in 2013 and 2014. A year-long mystery shopping exercise revealed that some of Santander’s advisers were putting pressure on customers to choose unsuitable investment products. The mystery shop found that 22% of the advisers were providing misleading information, and 28% gave inaccurate answers on costs.

The bank responded quickly to these issues with a focus on overhauling its investment advice services. They’ve also committed to paying compensation to any customers who are deemed to have received poor investment advice.

Steve Pateman, head of Santander’s banking in the UK, commented: “We regret that elements of Santander UK’s historic branch-based investments sales processes did not meet the required regulatory standards and apologise to any customers who have concerns.”

Read more about Santander investment mis-selling.


Widely said to be the worst offender when it comes to mis-sold investments, Lloyds were keen to be seen to be acting responsibly and told Daily Mail-run site This is Money in 2013 that they would conduct a complete review of their structured product sales. They also said they would pay compensation “equivalent to the return on a cash savings account” if an investment was found to be mis-sold.

However, Lloyds made the news again in 2015 for refusing compensation to a customer who had been sold a 15-year savings policy despite being only 7 years from retirement age.

Ombudsman Tony Moss, who was in charge of the case, said that in spite of Lloyds Bank’s considerable protests he believed that the policy was “not suitable” for the customer’s circumstances at the time of selling.

Read more about Lloyds investment mis-selling.

Bank of Scotland

The Bank of Scotland, a part of the Lloyds Banking Group, also came under scrutiny in 2011 for mis-selling investment products to 8,614 customers who had previously had their complaints rejected. The bank was ordered to pay a fine by the Financial Services Authority (FSA) to compensate those affected.

Tracey McDermott, acting director of enforcement and financial crime for the FSA, said: “This fine reflects the Bank of Scotland’s serious failure to treat vulnerable customers fairly.”

Ray Milne, risk director for Bank of Scotland, responded: “We apologise to them for this. We are committed to putting this right. I would like to assure customers that the issues relate to processes that are no longer used today… we will pay compensation where it is due.”


In 2015 Barclays were publically accused of mis-selling over 90% of their interest rate swap agreements to small businesses two years earlier. Jason Schofield, director of one of the businesses affected by the mis-sold product, claims that the bank have forced his company into administration after they attempted to make him pay back £21m.

“I pleaded with the bank to give me time to get back from Italy and try to find a solution, but it seemed they weren’t interested,” he said. “The next day, administrators from Deloitte turned up, changed the locks and took control. That was that.”

In their defence against a lawsuit from Mr Schofield, Barclays said: “They had access to and relied upon their own solicitors for advice where appropriate.” They also added that Mr Schofield’s business had previously taken out investment products with Yorkshire bank, and claimed they were “considerably more complicated than the interest rate swaps in these proceedings.”

Read more about Barclays investment mis-selling.













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