HomeServe which sells insurance policies for burst pipes and blocked drains, among other things, has been investigated by the FCA/Financial Conduct Authority and could be fined $49m for mis-selling household emergency insurance policies and for handling customer complaints in a poor manner.
While the fine could be as much as £49m, it is expected to be less, however it will still be a substantial amount and more than the £6m fine the company had anticipated.
HomeServe has stated, “This is higher than the company’s provision and HomeServe is therefore prudently increasing its provision by £30m.
“HomeServe will now engage in discussions with the FCA to finalise the notice.”
The company had previously been fined £750,000 by Ofcom in 2012 for “silent and abandoned” calls.
This is a massive fine and shows the ability and authority of the FCA. It also will send shock waves to other insurers and financial firms regulated under the FCA that mis-selling and poor customer service will not be tolerated.