The FCA has fined TSB Bank plc £10,910,500 for failing to ensure fair treatment of customers in arrears and for inadequate systems and controls.

TSB’s lack of robust processes resulted in £99.9 million in compensation for 232,849 customers who had mortgages, overdrafts, credit cards, or loans impacted by its failings.

From June 2014 to March 2020, TSB’s flawed approach created a risk of unrealistic repayment plans, compounded by insufficient training for staff in understanding customer circumstances. Additionally, incentive schemes may have pressured staff to prioritize the number of plans over properly assessing the individual needs of customers.

As a result, TSB risked agreeing to unaffordable payment terms, further stressing vulnerable customers or charging them inappropriate fees. An independent review, commissioned by the FCA in July 2020, revealed the extent of these failings.

Although TSB was aware of issues in its collections and recoveries processes as early as December 2016, it did not fully address them until the FCA-initiated review in 2020.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, emphasized that struggling customers deserve fair treatment, not additional hardship, and that TSB’s systems failed to protect them. While TSB has since taken action, it was only after regulatory intervention that they comprehensively addressed the problems.

TSB worked closely with the FCA and independent reviewers to resolve the issues, investing £105 million in corrective measures. The FCA remains vigilant in supervising all firms to ensure they have effective processes to support customers in financial difficulty.