A major bank has been slapped with a £10.9million fine by the Financial Conduct Authority (FCA) for failing to treat customers in financial difficulty fairly over a six-year period.
The UK’s financial watchdog criticised the bank’s “woeful systems and controls” that exposed customers to potential harm between June 2014 and March 2020.
TSB, the bank in question, has already paid out nearly £100 million in compensation to more than 230,000 affected customers across various financial products, including mortgages, overdrafts, credit cards, and loans.
The FCA’s investigation revealed inadequate training for staff responsible for arranging repayment plans for customers in arrears, potentially leading to unaffordable payment arrangements and inappropriate fees being charged.
It is feared that staff may have been incentivised to focus on quantity over quality when setting up repayment plans, potentially neglecting individual circumstances.
This approach risked agreeing to unaffordable payment arrangements and charging inappropriate fees.
TSB. the bank in question, has already paid out nearly £100 million in compensation to more than 230,000 affected customers across various financial product
PA
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, lambasted the bank, stating: “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.”
The regulator noted that these failings could have exacerbated uncertainty and stress, particularly for vulnerable customers.
Despite being aware of potential problems as early as December 2016, TSB failed to take effective action until an external review in 2020 brought the issues to light.
TSB has undertaken significant efforts to rectify the issues and compensate affected customers. The bank implemented a comprehensive £105 million programme to address the faults in its systems and processes.
A TSB spokesperson acknowledged the historic nature of these issues, stating: “We have contacted all affected customers to apologise and reimburse them for not providing the level of service we should have.”
The bank claims to have fixed the underlying problems and has “considerably enhanced our support for customers experiencing financial difficulty.”
Initially, TSB faced a potential fine of £15.6million. However, this was reduced by 30 per cent due to the bank’s cooperation with the FCA in addressing the failings and compensating customers.
Despite these remedial actions, TSB continues to face challenges. As recently as this morning, customers reported issues accessing the bank’s mobile app and online banking services, highlighting ongoing concerns about the bank’s technological infrastructure.
TSB customers reported problems accessing the bank’s mobile app and online banking services, with hundreds of users experiencing issues.
The bank acknowledged the problem on social media, stating: “We’re sorry that some of our customers are facing problems accessing our services this morning. Our teams are working to resolve this.”
This latest technical glitch serves as a reminder of the importance of robust systems and controls in the banking sector, particularly as more customers rely on digital banking services.
The FCA’s action against TSB underscores the regulator’s commitment to ensuring fair treatment of customers, especially those facing financial hardship.