The FCA found HomeServe had serious, systemic and long running failings, extending across many key aspects of its business.

In particular, during the period January 2005 to October 2011 it mis-sold insurance policies, failed to investigate complaints adequately, its board was insufficiently engaged with compliance matters and its senior management were reluctant to address risks to customers if there was a cost implication involved, the FCA said.
 
HomeServe is an insurance intermediary, which sells home emergency and repairs insurance cover. The regulator said, following a rapid expansion in the growth of its business, HomeServe developed a profit driven culture where profit targets were met by taking advantage of existing customers in pursuit of sales.

To date, HomeServe has paid approximately £12.9m to affected customers in redress and is expected to pay a total of £16.8m.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “This is a serious case, one that has warranted our largest retail conduct fine and generated a sizeable bill for consumer redress. 

“HomeServe is another example of a firm that has acted without proper regard for its customers over a long period of time.

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“HomeServe promises to provide customers with peace of mind when things go wrong. In fact the firm’s culture, controls and remuneration structures meant that staff were focused on quantity not quality and there were customers that paid the price for that.

“Firms must put the interests of customers at the heart of their business if we are to restore trust and confidence in financial services.”