In December 2011 HSBC was fined £10.5m by the Financial Services Authority (FSA) for mis-selling investment bonds to elderly people in care through its subsidiary NHFA. These policies which were designed to fund care costs were unsuitable in more than 80% of cases and resulted in the largest retail fine to date.

Investments between 2005 and 2010 were typically for more than £100,000 and to customers with an average age of 83. Policies were designed for an investment of at least 5 years although many customers had far shorter life expectancies and in the face of significant withdrawals and charges many customers lost out with significant capital erosion.

NHFA was the largest advisor in relation to such products although by no means alone. HSBC has set aside £29m to cover its own liability.

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