Barclays worst offender as FSA orders £160m compensation payouts
Tuesday, 03 January 2012 11:56
More than £160 million in compensation was paid by banks to customers last year, according to new figures released this week.
The Financial Services Authority (FSA) implemented a crackdown on poor practices by banks and building societies, resulting in a record amount being paid out, the Financial Times reports.
The £160 million was almost treble the £62 million paid in compensation in 2010, law firm Freshfields discovered.
Barclays was found to be the worst offender, having to pay £59 million to consumers last year. This included a £7.7 million fine for mis-selling funds, most of which were unsuitable, with staff at the bank not having been trained to explain the risks involved.
Meanwhile, HSBC also incurred a fine of £10.5 million for mis-selling bonds to elderly people.
Acting FSA enforcement director Tracey McDermott said: "We have had some significant retail fines against big firms that should know better. The big players have the potential to damage larger swathes of the community than the small firms."
Last month, chief executive of Barclays Bob Diamond told a Treasury select committee of MPs that bankers' bonuses may be cut to reflect and pay for the financial penalties it has picked up.
He pointed out that while all the executives involved have now left, the fine is "expensive" and needs to feature in discussions about pay.
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