TSB fined £10.9m over ‘woeful’ systems that put customers at risk

TSB Bank has been fined £10.9 million by the UK’s financial watchdog after its “woeful” systems were found to leave customers at risk of harm.
The Financial Conduct Authority (FCA) fined TSB after it found that the bank had failed to treat customers in arrears fairly.
The watchdog said that TSB’s failings created a risk that customers in financial difficulty would be charged incorrect fees or agree to unaffordable payment plans. The FCA said that this meant that customers in arrears faced the possibility of increased uncertainty and stress.
More than 230,000 mortgage, overdraft, credit card and loan customers were found to have been affected and were paid £100 million in redress.
The financial watchdog said the bank’s “woeful systems and controls exposed its customers to risk of harm”.
Between June 2014 and March 2020 the bank had “inadequate” processes that created a real risk that payment plans for customers in financial difficulty were “not realistic”, according to the financial regulator’s findings.
It found that the bank’s training did not support staff to help customers. The FCA also revealed that staff were potentially encouraged by incentive schemes at TSB to prioritise the number of plans created over taking enough time to evaluate each customer’s financial circumstances.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, 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.”
She added that while the bank did take action, it acted to address all the issues raised only after the FCA had instigated a review.
TSB is understood to have worked with both the FCA and the reviewer and agreed to a £105 million programme to fix the issues raised in the inquiry.
A spokesman for the 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.”
Separately on Thursday, TSB also suffered an outage, with customers unable to access their bank accounts after its app went down.