TSB has been fined £11m for failing to ensure over 200,000 mortgage and other customers in arrears were treated fairly — and has agreed a further £100m package to correct its dealings with these borrowers, the Financial Conduct Authority says.
The City watchdog says the high street bank “lacked suitable systems and controls to secure fair outcomes for these customers”.
Apart from a £10.9m fine to the regulator, it has paid £99.9m in redress to 232,849 mortgage, overdraft, credit card and loan customers affected by its actions.
The regulator says between June 2014 and March 2020, TSB’s “inadequate processes created a real risk that repayment plans were not realistic.”
It adds: “Staff were potentially encouraged by incentive schemes to prioritise the number of plans made over taking enough time to assess individual customer circumstances.”
This put customers at risk of “agreeing unaffordable payment arrangements” and being charged “inappropriate fees”.
The watchdog points out that the extent of TSB’s failings was brought to light after an independent review of the bank’s treatment of these customers, which had been ordered by the FCA in July 2020.
It says: “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.”
Financial Conduct Authority joint executive director of enforcement and market oversight Therese Chambers says: “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.”
Last week, the FCA fined digital lender Starling Bank £29m for the “shockingly lax” screening of high-risk customers, which left the lender exposed to money laundering and other financial crimes.
