Homeserve faces mis-selling investigation
HomeServe, which provides emergency insurance cover and domestic repairs to households in the UK, is to be investigated by the Financial Services Authority (FSA).
Issues over the possible mis-selling of household emergency policies were uncovered last October during an internal review at the Walsall-based company.
Homeserve’s call centre staff were found to be selling ‘Complete Cover’ policies as an upgrade to existing customers
Problems were also uncovered with how Homeserve staff were dealing with complaints.
It is believed that it is these ‘historic issues’ which will be investigated by the FSA.
In the face of the FSA enquiry HomeServe plans to streamline its business in the UK, with the number of UK customers being reduced from 2.7 million to between 2.2 million and 2.4 million.
It also plans to reduce its UK workforce by around 250 as part of the restructuring, having already announced the loss of 200 jobs earlier in the year.
The company will focus on strengthening partnerships with water utilities, manufacturers of installed appliances and financial services companies.
Richard Harpin, chief executive of HomeServe, said: “We took swift and comprehensive action to address the issues that we identified in the UK and are totally committed to restoring our customer focus.
“We are strengthening our management teams, retraining staff and continuing to make significant investments in customer service.”
The FSA investigation is expected to take several months to complete.
The news of Homeserve’s restructuring caused its shares to fall 23 per cent on the FTSE 250 Index, reducing the value of the company by nearly £200 million.
It was announced yesterday that NWF Group’s finance director, Johnathan Ford, is leaving to become Homeserve’s Chief Financial Officer.
Mr Ford will commence his new role at Homeserve in October.