TSB Bank fined £10.9m by FCA over handling of customers facing financial difficulty
The Financial Conduct Authority (FCA) has fined TSB Bank £10,910,500 for “failing to ensure customers who were in arrears were treated fairly” and lacking “suitable systems and controls to secure fair outcomes”.
TSB received a 30% reduction in its fine after agreeing to settle
The FCA says that the “extent of the failings were identified by an independent review into TSB’s treatment of customers who had fallen into arrears, which had been ordered by the FCA in July 2020”.
“TSB had become aware of potential problems with its collections and recoveries in December 2016. However, it was not until the review in 2020 that TSB took effective action to fully address them,” the regulator claims.
The FCA says that between June 2014 and March 2020, “TSB’s inadequate processes created a real risk that repayment plans were not realistic”, adding that training provided by the bank “did not fully support its staff in understanding customers’ circumstances”.
Additionally, the FCA says that staff “were potentially encouraged by incentive schemes to prioritise the number of plans made over taking enough time to assess individual customer circumstances”.
The regulator highlighted that, due to these shortcomings, “TSB risked agreeing unaffordable payment arrangements with customers in difficulty or charging them inappropriate fees. This risked increased uncertainty and stress, including for vulnerable customers”.
To date, TSB has paid £99.9 million in redress to the 232,849 credit card, loan, mortgage, and overdraft customers affected.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, states: “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,” adds Chambers.
