LONDON (Reuters) - Banking giant HSBC has been fined 6.2 million pounds ($7.9 million) for failing to treat financially-stretched customers fairly, Britain's Financial Conduct Authority (FCA) said on Thursday.

The FCA said it had imposed the penalty on the bank's HSBC UK Bank Plc, HSBC Bank Plc and Marks and Spencer Financial Services units because they had failed to do proper affordability assessments and sometimes took disproportionate action when people fell into arrears between 2017 and 2018.

HSBC notified the FCA in 2018 after spotting problems with the way it handled customers in arrears or in financial difficulty and had already paid 185 million pounds in compensation to 1.5 million customers and invested 94 million pounds in improving procedures and staff trading.

Therese Chambers, the FCA's joint head of enforcement, said the bank deserved credit for identifying problems and putting them right. But she told the industry to sit up and take note of the cost the bank incurred.

"People must be able to trust their lenders to treat them fairly when in financial difficulty," she said. "By failing to do so, HSBC put 1.5 million people at risk of greater financial harm."

In a statement on Thursday, HSBC apologised to customers.

"We're sorry that between 2017 and 2018 some customers who fell into arrears did not receive the service they expected from us," a spokesperson said, adding that the bank had offered impacted customers full redress, invested in its processes and was pleased to have resolved the historic problem.

The level of the fine reflected the bank's response and its cooperation, which helped it qualify for a 30% reduction in the original 8.97 million pound fine, the FCA said.

($1 = 0.7868 pounds)

(Reporting by Kirstin Ridley;Editing by Elaine Hardcastle)