The Financial Conduct Authority (FCA) has fined TSB Bank £10.9m for failing to ensure customers who were in arrears were treated fairly.
The FCA has labelled TSB’s systems and controls as “woeful”, stating that between June 2014 and March 2020, the bank’s processes created a real risk that repayment plans were not realistic.
Additionally, the UK watchdog found that the TSB’s staff were not trained to understand customers’ circumstances and were potentially encouraged to prioritise the number of plans made over a customer’s circumstances.
Due to this, TSB risked agreeing payment arrangements with customers, which they would struggle to make or be charged inappropriate fees. This could have caused increased uncertainty and stress, especially for vulnerable customers.
The FCA has stated that TSB had become aware of potential issues 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.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, commented: ‘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.’
In 2018, TSB Bank was fined a total of £48.6m due to failures in its operational risk management and governance procedures relating back to IT upgrades in April 2018.
