HomeServe braced for £30m fine

Homeserve_1HomeServe, the home emergencies and repairs group, has admitted it has been slapped with a “warning notice” by the financial regulator about an impending £30.6m fine for mis-selling and poor complaints handling.
The company, which is no stranger to such penalties – having been hit with a £750,000 fine for silent calls back in 2011 – has revealed its latest misdemeanour to the stock market. It said the fine relates to an investigation by the Financial Conduct Authority (FCA) into “historic sales and marketing, controls and governance, and complaints handling”.
HomeServe, which insures more than 2 million people in the UK against burst pipes, broken gas boilers and electrical problems, suspended its entire salesforce amid fears they had been mis-selling its products three years ago, and retrained 500 call-centre staff voluntarily.
It is understood HomeServe has decided to fess up to the latest issue after previously telling investors it was going to be fined about £5m.
HomeServe said the proposed £30.6m fine, which it said assumed an early settlement discount of 30%, was “higher than the company’s provision, and HomeServe is therefore prudently increasing its provision by £30m”.
It added: “HomeServe will now engage in discussions with the FCA to finalise the notice and does not propose making any further comment during these discussions. The ongoing activities of the UK business are unaffected by this notice and the business continues to trade in line with expectations.”

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