In 2011 Barclays were fined a then record £7.7m and had to pay millions more in compensation when they were found to have sold high-risk investments to investors who didn’t want to take risks.
An investigation concluded that they had failed to adequately check the clients’ suitability and circumstances, as well as not acting promptly when failings were first detected.
In 2012 Santander were fined £12.4m for “serious failings” in the investment advice they had given their customers. Problems that inadequate assessments of people’s risk profiles were uncovered during a mystery shopping exercise. In one case it was reported a 71-year-old had been advised into a 6year investment without determining the customers personal circumstances such as health and income.
In 2013 the Lloyds banking group were fined £28m for “serious failings” relating to the way they rewarded their staff for sales targets. This bonus culture led to many customers being mis-sold investment products, in particular Individual Savings Accounts (ISA’s). The failings had affected branches of Lloyds TSB, Royal Bank of Scotland and the Halifax.
In 2011 HSBC were fined £10.5m for selling unsuitable products to 2500 elderly customers. NHFA, a subsidiary of HSBC, advised many clients to invest in fixed term bonds to help pay for care fees without adequately assessing their circumstances. As a result, some customers with shorter life expectancies than the investment term were forced to make withdrawals sooner than recommended. It was reported that 87% of the recommendations were unsuitable.
In 2013 the FSA uncovered widespread evidence of more poor investment advice.
HSBC reportedly had to review more than 200,000 customer investments purchases for mis-selling.
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