Belfast Telegraph

Tens of millions paid out to customers after bank crackdown

By Peter Cripps

Banks paid more than £160m in compensation to customers last year after a crackdown by the financial regulator.

Barclays was the worst offender in a year in which compensation was nearly treble the £62m in 2010, according to research by law firm Freshfields reported in the Financial Times.

The bank was ordered to shell out £59m to retail customers and was fined £7.7m for failings in the way it sold funds labelled "cautious" and "balanced".

The Financial Services Authority (FSA) crackdown also saw HSBC receive a record retail fine of £10.5m for mis-selling investment bonds to elderly customers.

Large financial groups paid £55.7m in fines during the year, down from £79m in FSA fines the previous year. Banks were ordered to pay at least £1m in compensation in at least five cases.

The FSA's Tracey McDermott told the newspaper: "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."

When penalties against individual salesmen were included, the FSA handed out just over £66m in fines last year.

This was the second highest total in its history behind 2010's £89m.

Some of the largest penalties came from a crackdown on wealth management firms and companies that didn't segregate client assets from company money.