Why the real issues of debt are left unaddressed

Inside Business: There remain gaps in the way lenders are regulated that could throw up similarly nasty problems in future given the debt mountain British consumers have built up

HSBC could pay out £11m or more in redress to 18,000 borrowers (AFP/Getty)

More than 18,000 people are set to get money back from HSBC after the lender “voluntarily” agreed to extend its redress scheme to customers who fell victim to punitive debt collection charges levied by two of its lenders, the City watchdog has announced.

This is good news, and couldn’t we all do with some of that right now. But it also once again serves to expose the yawning gaps in the way lenders have been regulated.

First the background. Between 2003 and 2009, customers who fell into arrears with either HFC Bank or John Lewis Financial Services – both of which are now part of HSBC – were referred to solicitors nominated by the firms.