LONDON (Reuters) - British repair and insurance group HomeServe has agreed to pay a 30.6 million pounds ($51 million) fine, the largest retail penalty imposed by the UK’s financial regulator, after it was found to have committed a series of failings including mis-selling policies.
The investigation, which started in May 2012, found that from January 2005 to October 2011 HomeServe mis-sold insurance policies and failed to look into complaints adequately, while its board had not engaged with compliance matters and senior management were reluctant to address risks to customers if there was a cost implication involved.
The fine, which is lower than the 34.5 million pounds penalty proposed by the UK’s Financial Conduct Authority in a draft notice in January, includes a 30 percent discount for early settlement.
“HomeServe has accepted that it needed to restore its customer focus and move away from a culture of putting profits before treating customers fairly,” the FCA said in a statement.
The previous largest fine was 28 million pounds, imposed on Lloyds Banking Group in December.
The investigation has now concluded, HomeServe said on Thursday, drawing a line under a turbulent few years that have rocked the firm, with customer numbers falling and the group’s share price now 31 percent lower than the 485 pence in October 2011 when problems with its marketing procedures first arose.
“We sincerely regret that some customers have been affected by these issues. We have transformed the business, rebuilding and strengthening the management team, retraining staff and restructuring systems and controls,” HomeServe Chief Executive Richard Harpin said in a statement.
The company has paid around 12.9 million pounds to affected customers in redress and is expected to pay a total of 16.8 million in total.
HomeServe said it would not need to make further provisions for the fine and the associated remediation exercise.
Shares in HomeServe were down 1.2 percent at 330 pence at 0809 GMT.
($1 = 0.6030 British pounds)
Reporting by Neil Maidment; editing by James Davey