The Financial Services Authority (FSA) said it would extend the amount of time needed by HSBC to handle the complaints over the mis-selling of payment protection insurance (PPI) products.
“The arrangements extend the time periods HSBC has to deal with their backlog of stayed PPI complaints and the high volume of new complaints on PPI and have been put in place to ensure that the firms are able to handle the PPI complaints properly,” the FSA said in a statement.
Earlier this week, the FSA also gave rival Barclays more time to handle customers’ complaints and claims over the PPI mis-selling after large numbers of clients contacted British banks over the issue.
PPI insurance policies were typically taken out alongside a personal loan, mortgage or purchase to cover repayment if the borrower was unable to pay due to unemployment, sickness or accident.
But the policies were often mis-sold to self-employed or unemployed people who would not have been able to claim.
They were also mis-sold to consumers who did not realize they were taking out such a policy and a court ruled that the banks were at fault.