The FCA has fined TSB Bank £10,910,500 for failing to ensure customers who were in arrears were treated fairly.
In levying the fine, the watchdog says that the UK lender also lacked suitable systems and controls to secure fair outcomes.
TSB has additionally paid £99.9m in redress to the 232,849 mortgage, overdraft, credit card and loan customers affected and spent £105 million on new processes to resolve the problems uncovered.
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.
Between June 2014 and March 2020, TSB’s "inadequate processes" created a real risk that repayment plans were not realistic, the FCA determined, noting that training did not fully support its staff in understanding customers’ circumstances. More seriously, staff were potentially encouraged by incentive schemes to prioritise the number of plans made over taking enough time to assess individual customer circumstances.
As a result of its failings, 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, says Therese Chambers, the FCA's joint executive director of enforcement and market oversight.
"If you get into difficulty, you hope for - and we expect - fair treatment so a stressful situation isn’t made worse," says Chambers. "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."
The lender would have been fined £15,586,500 but agreed to resolve these matters and thus qualified for a 30% discount under the FCA’s enforcement processes.
The lender is facing further problems with its IT systems this morning, apologising to customers after its mobile app and online banking services were hit by a major outage. Needless to say, long-suffering customers were not impressed.