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Homeserve is fined £30.6m by FCA Homeserve is fined £30.6m by FCA
(about 3 hours later)
Maintenance company Homeserve has been fined £30.6m by the City regulator, the Financial Conduct Authority, owing to historical sales problems.Maintenance company Homeserve has been fined £30.6m by the City regulator, the Financial Conduct Authority, owing to historical sales problems.
This is the largest retail fine handed down to date by City regulators.This is the largest retail fine handed down to date by City regulators.
The Financial Conduct Authority had proposed the fine following an 18-month investigation.The Financial Conduct Authority had proposed the fine following an 18-month investigation.
Questionable sales techniques and complaints handling procedures emerged following an internal company review in 2011. Questionable sales techniques to elderly customers and poor complaints handling procedures emerged following an internal company review in 2011.
The FCA said it had found that Homeserve had "serious, systemic and long-running failings, extending across many key aspects of its business".The FCA said it had found that Homeserve had "serious, systemic and long-running failings, extending across many key aspects of its business".
It said that between January 2005 and October 2011, it had mis-sold insurance policies and failed to investigate complaints adequately, while its board was "insufficiently engaged with compliance matters".It said that between January 2005 and October 2011, it had mis-sold insurance policies and failed to investigate complaints adequately, while its board was "insufficiently engaged with compliance matters".
Business 'transformed'Business 'transformed'
Homeserve chief executive Richard Harpin said the firm sincerely regretted that some customers had been affected by those issues.Homeserve chief executive Richard Harpin said the firm sincerely regretted that some customers had been affected by those issues.
He added: "We have transformed the business, rebuilding and strengthening the management team, retraining staff and restructuring systems and controls.He added: "We have transformed the business, rebuilding and strengthening the management team, retraining staff and restructuring systems and controls.
"We have worked very hard over the last two years to put customers back at the heart of our business and we are committed to offering valuable products with a high quality of service.""We have worked very hard over the last two years to put customers back at the heart of our business and we are committed to offering valuable products with a high quality of service."
Homeserve was founded in 1993 by Mr Harpin as a joint venture with South Staffordshire Water and grew rapidly. It demerged from the water company in 2004.Homeserve was founded in 1993 by Mr Harpin as a joint venture with South Staffordshire Water and grew rapidly. It demerged from the water company in 2004.
Homeserve sells homeowners insurance to provide them with cover against drain blockages, burst pipes, faulty boilers and electrical problems. It describes itself in adverts as "Britain's fifth emergency service".Homeserve sells homeowners insurance to provide them with cover against drain blockages, burst pipes, faulty boilers and electrical problems. It describes itself in adverts as "Britain's fifth emergency service".
But there were questions over whether the cost of its packages of cover was clear to customers.But there were questions over whether the cost of its packages of cover was clear to customers.
The FCA investigation found:
Customers who were affected have been, or will be, contacted directly by the company with regards to compensation.Customers who were affected have been, or will be, contacted directly by the company with regards to compensation.