FCA Imposes Record Fine for HomeServe’s Widespread Breaches of FCA’s Principles of Business


    The Financial Conduct Authority (FCA) has fined HomeServe Membership Limited (HomeServe) £30,647,400 for breaching several of the FCA’s Principles of Business. The FCA states its final notice that HomeServe’s failings were “serious, systemic and long running”.

    The FCA found HomeServe, an insurance intermediary, to be in breach of:

    • principle 3, due to its failure to take reasonable care to organise and control its affairs responsibly and effectively and with adequate risk management systems;
    • principle 6,  by failing to pay due regard to its customers’ interests and treat them fairly with regard to complaints handling; and
    • principle 7, by failing to pay due regard to the need to communicate information to customers clearly, fairly and without misleading.

    The FCA stated that HomeServe mis-sold insurance policies and subsequently failed to investigate customer complaints. The financial services regulator raised specific concerns that HomeServe’s failings were a systemic problem, arising from inadequate training and remuneration structures that incentivised staff behaviours that were potentially contrary to customer interests.

    The penalty, which is the FCA’s largest ever retail conduct fine, would have been higher still, had HomeServe not qualified for a 30% discount for early settlement. The intermediary is expected to have to pay an additional total of £16,800,000 in respect of customer redress.

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