Age UK to repay commission from investment referrals

The move follows fines on HSBC for mis-selling products to elderly customers

Age UK
Age UK

Age UK will repay money Help the Aged made from referring older people to an organisation that has been fined for mis-selling them investment products.

The charity said it would repay commission received by Help the Aged when it directed people to the Nursing Home Fees Agency for care funding advice. Age UK was formed by the merger of Help the Aged and Age Concern in April 2010.

The banking giant HSBC, which took over NHFA in July 2005, was fined a record £10.5m by the Financial Services Authority earlier this week for mis-selling products to elderly customers.

HSBC is likely to pay £29.3m in compensation to customers on top of the fine, according to the FSA. The regulator found NHFA had sold long-term investments to customers who were likely to die before the products paid out.

NHFA sold 2,485 of these products to people who had an average age of 83 and invested a total of £285m. Research carried out on a sample of cases found 87 per cent of investors in these products had been mis-sold them.

Age UK was unable to say how much commission Help the Aged made from referrals, but said it would return the money to the investors or their families.

Gordon Morris, managing director of Age UK Enterprises, said: "Help the Aged had a relationship with the Nursing Home Fees Agency until 2009, but Help the Aged did not advise potential customers or have any input in investment decisions. The relationship was reviewed as part of the Age Concern and Help the Aged merger process and it was decided by the new charity, Age UK, to terminate this relationship.

"The historic nature of many of these cases means that there is a lot of background work to do to ensure that we have the right information about each person involved and the scale of Help the Aged customers affected.

"HSBC, as parent of NHFA, bears full liability for its losses. However, we are offering to return any historic commission made by the charity Help the Aged on the product to those affected or their families.

"We have set up a dedicated helpline 0800 030 4709 for those whose product is linked to Help the Aged to call."

The FSA investigation covered the period between 2005, when HSBC bought NHFA, and 2010. HSBC contacted the FSA and closed NHFA to new customers on 1 July 2011.

Brian Robertson, chief executive of HSBC, said the bank was "profoundly sorry" and was contacting customers who may have been mis-sold products.

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