TSB Bank fined £10.9m by FCA over handling of customers facing financial difficulty

TSB Bank was fined £10,910,500 by the Financial Conduct Authority (FCA) for failing to treat customers in arrears fairly and for lacking appropriate systems and controls.
The fine was reduced by 30% after TSB agreed to settle with the FCA.
An independent review commissioned in July 2020 found that between June 2014 and March 2020, TSB’s staff training did not adequately support understanding customers’ circumstances.
Some staff were influenced by incentive schemes that prioritized the number of repayment plans over proper customer assessments, potentially leading to unaffordable payment arrangements and inappropriate fees.
232,849 customers with credit cards, loans, mortgages, and overdrafts were affected, and TSB has paid £99.9 million in redress to these customers.
Therese Chambers, FCA’s joint executive director of enforcement, criticized TSB’s weak systems and controls and noted that the bank only took effective action after the FCA’s review.
In July, the Competition and Markets Authority (CMA) also found that TSB incorrectly disclosed the monthly maximum charge (MMC) for unarranged overdrafts between February 2021 and January 2024.