Customers of a number of high street banks could receive a compensation lump sum at some point this month, Martin Lewis has revealed.
The presenter and finance expert has explained that thousands who banked with HSBC, First Direct, Marks & Spencer bank or John Lewis Finance between 2010 and 2019 were affected by errors made by the companies.
The banks are looking to rectify payment mistakes they made over a decade ago, Martin said on ITV's Money Show.
It applies only to those who were in arrears to the bank through their mortgage or current account at some point in that nine year timeframe.
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Consumer expert Martin said: "If you banked with HSBC, First Direct, Marks & Spencer bank or John Lewis Finance between 2010 and 2019 and you were in mortgage or current account arrears at some point, you may be due a payout.
"HSBC, which runs all three accounts, has admitted its customer service was in the wrong, so it's automatically issuing compensation.
"These cheques are being sent out until March. If you receive one, do not bin it. They're worth £50 cash in the bank."
How has this error happened?
Borrowers who fell behind on repayments between 2010 and 2019 could be due up to £50 in compensation after the bank admitted it delivered a substandard level of service over the nine year period.
HSBC Group, which all four brands come under, said an internal review uncovered instances where customers in arrears hadn't received the quality of service expected. Last year, it decided to put this right.
It's not a scam, despite some confusion caused by letters arriving out of the blue.
Mortgage, personal loan and credit card customers may all have been affected, as the issue impacts all types of banking where you could fall behind on repayments.
HSBC has said examples of bad practice included "poorly worded letters that didn't engage customers who might have been struggling to make repayments".
How can I claim for the compensation?
HSBC previously said anyone due compensation would be contacted directly, so you don't need to do anything – even if you're no longer a customer.
If you're eligible for compensation, you will automatically receive a cheque in the post sometime before the end of March 2021.
The amount on the cheque will vary depending on the service that you received.
A HSBC UK spokesperson said: "We always strive to do the right thing by our customers. Regrettably, some historic cases where customers were in arrears at times fell short of this commitment.
"We are taking action to put that right and remediate customers who may have been impacted. Customers do not need to do anything.
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