Thousands of HomeServe customers could get redress after the firm was fined a record £30.6 million for mis-selling insurance products.
The Financial Conduct Authority (FCA) says its investigation exposed "serious, systemic and long-running failings" between January 2005 and October 2011, and a "profit-driven culture" where sales targets were met by taking advantage of existing customers.
In particular, between November 2006 to October 2011, HomeServe mis-sold two insurance policies the Complete Cover Policy and the Combined Utilities Policy to 69,000 customers.
The firm's products include boiler and central heating breakdown cover and insurance against blocked drains.
The FCA says the firm:
- Failed to investigate complaints adequately.
- Had inadequate IT software in place, which resulted in some customers being overcharged and being charged for duplicate cover they didn't need.
- Put pressure on staff to close as many complaints as possible, meaning there was a risk that grievances weren't handled fairly and customers didn't receive appropriate redress.
FCA director Tracey McDermott says: "HomeServe is another example of a firm that has acted without proper regard for its customers over a long period of time.
"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."
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HomeServe has so far paid £12.9 million in redress to affected customers with this figure expected to rise to £16.8 million in total.
The firm says it's contacting customers it mis-sold products to, as well as those whose complaints weren't handled correctly in the first instance, to offer them redress.
It told MoneySavingExpert.com it will speak to all affected customers by "the end of March" and that the average redress being paid to each customer is about £200.
If you think you're affected and you haven't heard from HomeServe by April, you should call the firm on 0800 121 6866.
This isn't the first fine HomeServe has had to pay over the scandal. It was told to pay £750,000 by telecoms regulator Ofcom in 2012, and told to give compensation to people who received silent and abandoned calls made by the firm (see the Compensation due after Homeserve fined MSE News story).
What HomeServe says
HomeServe chief executive Richard Harpin says: "We sincerely regret that some customers have been affected by these issues.
"We have worked very hard over the last two years to put customers back at the heart of our business and we are committed to offering valuable products with a high quality of service."