HomeServe crisis after probe into mis-selling

HomeServe shares today lost almost half of their value as investors reacted to claims emergency insurance policies may have been mis-sold to customers.

The home repairs and insurance company has suspended 100 workers at its biggest call centre in cable Drive, Walsall, and will now re-train nearly 500 call centre staff.

The emergency repairs company said in a statement yesterday that it had suspended all telephone sales after an independent report found call centre staff guilty of mis-selling.

The review, conducted by accountant Deloitte on behalf of HomeServe, found that there were "cases where its sale processes did not meet the company's required standards".

The problems were reported on scripts used by its sales team to explain pricing and policy details.

Shares initially fell 50 per cent in light of the investigation before recovering to stand at 308p in early trading, after plunging from Friday's close of 485.3p, wiping more than £600 million from the paper value of the firm.

Homeserve chief executive Richard Harpin said the company would resume marketing once it was confident "the sales processes meet the standards that we and our customers expect".

The company, valued at £1.6 billion, had seen its share price more than double over the past three years.