TSB fined millions for poor treatment of customers

TSB Bank have been hit with a hefty £10.9m from the Financial Conduct Authority (FCA) for failing to treat struggling customers fairly.

According to the watchdog, the lender had been aware of potential problems since December 2016, but didn’t act until 2020.

The failings, which date back to June 2014, include ‘unrealistic’ repayment plans and poor staff training.

Over 230,000 people with mortgages, overdrafts, credit cards and loans were affected, facing unaffordable payment arrangements, inappropriate fees and increased stress.

‘Woeful systems and controls’

Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, 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.

“While it did take action, it took us instigating a review before it acted effectively to address all the issues.”

TSB have apologised to everyone affected for “not providing the level of service we should have”.

A spokesperson said they’d “fixed the underlying issues some time ago” and increased their support for struggling customers.

Did TSB put things right?

TSB have paid £100m in compensation to those affected and improved customer support.

They would have been fined more than £15m but qualified for a 30% discount for agreeing to put things right.

What are lenders’ responsibilities?

Every lender is responsible for making sure customers are treated fairly and there are guidelines they must follow.

If you’re finding it tough to keep up with repayments because of money problems, your bank or building society should handle your situation with understanding and care.

When you’re struggling, here’s what a lender typically does:

• reach out if they suspect you’re starting to struggle financially
• discuss ways they can help those in financial trouble
• provide information about where you can get free debt advice
• collect information about your situation to recommend a suitable option for you
• keep you updated about how much you owe
• try to create an affordable plan to help you get back on track with your payments
• give you notice before taking any serious action, like involving the courts, which should always be a last resort

If you're finding it hard to make repayments, get in touch with your lender and find out what support is available.