The high street bank has been fined £10.9million by the Financial Conduct Authority (FCA) for the historic failures noting that TSB “didn’t have the right systems to ensure fair treatment for those in debt
TSB has paid nearly £100million in compensation to around 200,000 customers who were “unfairly treated” while in debt.
The high street bank has been fined £10.9million by the Financial Conduct Authority (FCA) for the historic failures noting that TSB “didn’t have the right systems to ensure fair treatment” for those who needed extra support paying off their mortgage, overdraft, credit card and loan debt. This subsequently left people struggling and facing unaffordable payment arrangements or inappropriate fees.
The fine came after the FCA ordered an independent review into TSB’s treatment of customers in July 2020. The FCA found that between June 2014 and March 2020, TSB’s poor practices put thousands of these customers on repayment plans they couldn’t afford.
A repayment plan allows you to pay back money you owe over time rather than all at once. When you are put on a payment plan, you will make small regular payments until you pay off the debt. The FCA said that TSB staff may have been encouraged to issue as many repayment plans as possible instead of properly assessing each customer’s situation and tailoring it to their needs.
TSB added that this could have been down to a lack of training for TSB staff on understanding customer needs. This breaches the FCA’s rules, which state that “a firm must pay due regard to the interests of its customers and treat them fairly.”
Overall, 232,849 TSB customers were put on these plans and identified as having suffered or been at risk of suffering loss. As a result, TSB has paid £99.9 million in redress to the affected mortgage, overdraft, credit card, and loan customers.
However, the FCA said it should have acted sooner and, therefore, issued a fine. TSB was informed of these risks in 2016 and started looking into them a year later. The FCA said that TSB did not take “effective action” until the regulator launched an independent review. The fine could have been £15.5million, but TSB was allowed to pay less due to its cooperation with the investigation.
Therese Chambers, joint executive director of enforcement and market oversight, 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.”
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.”
