TSB fined £10.9m for ‘woeful’ systems leaving customers at ‘risk of harm’
The Financial Conduct Authority said the bank had inadequate processes between 2014 and 2020 for customers in arrears.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.TSB Bank has been fined £10.9 million by the UK’s financial watchdog for failing to treat customers in financial difficulty fairly over a six-year period.
The bank has paid nearly £100 million in redress to more than 230,000 mortgage, overdraft, credit card and loan customers found to have been affected.
The Financial Conduct Authority (FCA) said the bank’s “woeful systems and controls exposed its customers to risk of harm”.
Between June 2014 and March 2020, TSB was found to have inadequate training for staff who were in charge of agreeing repayment plans for customers in arrears.
Staff were potentially encouraged by incentive schemes to prioritise the number of plans they made over taking the time to understand individual circumstances and set realistic repayment plans.
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
This meant TSB risked agreeing unaffordable payment arrangements with people in difficulty or charging them inappropriate fees, according to the regulator’s findings.
It said this could have heightened uncertainty and stress, including for vulnerable customers.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “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.”
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
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
The FCA said TSB became aware of potential problems with its system in December 2016, but it did not take effective action to fully address them until the review was opened in 2020.
Nevertheless, TSB would have been fined £15.6 million but because it worked closely with the FCA to fix its systems and redress customers, the fine was cut by 30%.
The bank has finished a comprehensive programme to address the issues, costing it £105 million.
A spokesman for TSB 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.”