TSB Bank has been slapped with a £10.9 million fine by the Financial Conduct Authority (FCA) for its failure to fairly treat customers facing financial difficulties over a six-year span. The bank has already shelled out nearly £100 million in compensation to more than 230,000 mortgage, overdraft, credit card and loan customers identified as affected.
The FCA lambasted TSB’s “woeful systems and controls exposed its customers to risk of harm” which left its customers at risk of harm. From June 2014 to March 2020, TSB was found lacking in providing adequate training for staff responsible for agreeing repayment plans for customers in arrears.
Staff were potentially incentivised to focus on the quantity of plans they made rather than understanding individual circumstances and setting realistic repayment plans. This led to TSB potentially agreeing to unaffordable payment arrangements with people in difficulty or charging them inappropriate fees, according to the regulator’s findings.
The FCA stated this could have exacerbated uncertainty and stress, particularly for vulnerable customers.
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, lambasted the bank: “If you get into difficulty, you hope for – and we expect – fair treatment so a stressful situation isn’t made worse. TSB’s woeful systems and controls exposed its customers to risk of harm and meant it missed opportunity after opportunity to do the right thing. While it did take action, it took us instigating a review before it acted effectively to address all the issues.”
The FCA disclosed that though TSB was cognisant of potential problems with its system as early as December 2016, effective action was not taken until an external review in 2020 brought the issues to light. TSB was initially set to face a hefty £15.6 million fine, but this was reduced by 30% due to the bank’s collaboration with the FCA in rectifying the failings and compensating its customers.
After implementing a thorough £105 million programme to resolve the faults, a TSB spokesperson said: “These are historic issues and we have contacted all affected customers to apologise and reimburse them for not providing the level of service we should have. We fixed the underlying issues some time ago and have considerably enhanced our support for customers experiencing financial difficulty.”
