Between January 2005 and October 2011 it mis-sold insurance policies, failed to investigate complaints adequately, its Board was insufficiently engaged with compliance matters and its senior management were reluctant to address risks to customers if there was a cost implication involved. The FCA said that the company developed a 'profit driven culture where profit targets were met by taking advantage of existing customers in pursuit of sales'.
HomeServe has accepted that it needed to restore its customer focus and move away from a culture of putting profits before treating customers fairly. To date, HomeServe has paid approximately £12.9 million to affected customers in redress and is expected to pay a total of £16.8 million.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said:
"This is a serious case, one that has warranted our largest retail conduct fine and generated a sizeable bill for consumer redress. Homeserve is another example of a firm that has acted without proper regard for its customers over a long period of time. Homeserve promises to provide customers with peace of mind when things go wrong. In fact the firm’s culture, controls and remuneration structures meant that staff were focussed on quantity not quality and there were customers that paid the price for that.
"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."
