The UK’s financial watchdog has fined TSB Bank £10.9m after finding that its “woreful” system put customers at risk. The Financial Conduct Authority (FCA), after finding that TSB had not treated customers with arrears in a fair manner, fined the bank.
Watchdog warned that TSB’s failures could lead to customers with financial difficulties being charged incorrect fees, or agreeing to payment plans that are unaffordable. According to the FCA, customers who are in arrears could face increased stress and uncertainty.
Over 230,000 customers of mortgages, overdrafts, credit cards and loans were affected. They received £100 million as compensation. The Financial Watchdog stated that the bank’s “worse systems and controls expose its customers to harm”.
According to findings by the financial regulator, between June 2014 and March 2020 was “inadequate in its processes” that created the real risk of payment plans not being “realistic” for customers with financial difficulties.
The FCA found that training at the bank did not help staff to assist customers. The FCA revealed that TSB staff may have been encouraged to prioritize the number of financial plans over spending enough time evaluating each customer’s circumstances by incentive schemes.
Therese chambers, FCA’s joint executive director for enforcement and market supervision, stated: “If we get into trouble, we hope — and expect — fair treatment to avoid a stressful situation being made worse. TSB’s shoddy systems and controls exposed customers to harm, and it missed numerous opportunities to do the right thing.
She said that the bank had taken action but only after the FCA initiated a review.
TSB has reportedly worked with the FCA as well as the reviewer to agree on a £105million programme to address the issues raised by the inquiry.
A TSB spokesperson said: “These issues are historical, and we’ve contacted all customers affected to apologize and reimburse them for failing to provide the service level we should have.”
Separately, on Thursday, TSB suffered a similar outage. Customers were unable to log into their accounts because the app was down.
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