There is an update to this article. See HSBC employee afterthoughts when HSBC shut down HSBC Finance Corp in the U.S. Articles about HSBC jobs and layoffs can be seen here.

HSBC Finance is a “pay for performance” company, which means they look out for their best interests, not yours. It also means that mortgage loans in the U.S. followed the same “pay for performance” guidelines. That is part of why we have a subprime crisis today. Here is the report from the UK, describing how US-based HSBC Finance got in trouble this time:

A subsidiary of HSBC was yesterday hit with a record £1 million fine after the City watchdog uncovered a series of flaws in its insurance sales. HFC Bank, which operates in the UK under the names Household Bank and Beneficial Finance, sold payment protection insurance (PPI) to more than 160,000 people between January 2005 and December 2007 without checking whether customers needed the coverage. The bank also failed to keep proper records of its PPI sales, did not investigate possible cases of mis-selling and lacked a system that would have allowed senior managers to monitor the sales of PPI.

The bonuses paid to HFC’s sales staff – worth up to 25 per cent of their salaries – were heavily reliant on how much PPI they sold.

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