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Maintenance company Homeserve is being warned it faces a fine of £34.5m from the City regulator owing to historical sales problems.
This would be the largest retail fine ever handed down by the City regulator. The company said the Financial Services Authority had proposed the fine, having been investigating Homeserve for 18 months. Questionable sales techniques and complaints handling emerged following an internal review in 2011. The company has since been conducting a marketing overhaul.
Investigation
Homeserve was founded in 1993 by chief executive Richard 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". But there were questions over whether the cost of its packages of cover was clear to customers......Read more here
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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. 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. 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".
Business 'transformed'
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......Read more here