HOMESERVE, the home maintenance and insurance provider, saw more than £500m knocked off its value yesterday on fears that it had mis-sold services to some customers.
Homeserve, led by entrepreneur Richard Harpin, said it had banned all outbound phone calls to sell or market its products until further notice, following a probe by Deloitte that concluded its processes did not live up to the required standard.
Investors fled its shares, pushing them down by 30 per cent and taking its market capitalisation down to about £1bn from more than £1.5bn previously.
“We are determined to ensure customers receive the highest standards of service and we have therefore taken swift action to address the issues identified by our review,” Harpin said.
The Financial Services Authority, which regulates Homeserve, has been made aware of the problems but has not begun an investigation.
Analysts said Homeserve’s quick reaction should help limit damage to its reputation, but warned there could be bigger concerns if the FSA chose to investigate it, as it did with CPP, the identity theft insurer.
David Brockton at Espirito Santo downgraded the firm’s 2012 and 2013 earnings forecasts, saying the sales ban would hurt customer growth. “A lower renewal base heading into 2013 acts to materially reduce our profit expectation,” he said.