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Release Date: 12th February 2014

To access the original FCA document, click here.


HomeServe Membership Limited, an insurance intermediary specialising in home emergency and repair cover, has been fined £30,647,400 by the Financial Conduct Authority (FCA). This marks the largest ever retail fine issued by the FCA, reflecting serious, systemic, and prolonged failures within the company from January 2005 to October 2011. HomeServe’s failings include mis-selling insurance policies, inadequate complaint investigation procedures, a lack of board engagement with compliance issues, and a senior management reluctance to address customer risks when costs were involved.

The investigation uncovered that HomeServe’s rapid business growth fostered a profit-driven culture prioritising sales targets over customer interests, often exploiting existing customers. These practices led to approximately £12.9 million in customer redress, with total expected payouts nearing £16.8 million. Tracey McDermott, the FCA’s director of enforcement and financial crime, highlighted the case as a severe example of a firm neglecting customer needs over an extended period. McDermott emphasised that the financial services industry must place customer interests at its core to regain trust and integrity.

The FCA identified breaches of several of its Principles of Business:

These failings were particularly concerning given the vulnerability of a significant portion of HomeServe’s customer base, many of whom were retirees. HomeServe has since made efforts to amend its practices and improve its focus on customer welfare. The firm settled early in the investigation, receiving a 30% discount on the fine, which otherwise would have amounted to £43,782,058.

Key takeaways for other firms include

This case serves as a stark reminder of the financial and reputational risks associated with neglecting these areas.

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