Britain’s TSB Bank has been fined £10.9m by the markets watchdog for its failure to treat customers who were in arrears fairly.
According to Reuters, the Financial Conduct Authority (FCA) imposed the penalty after discovering that the bank had not ensured that those falling behind on mortgages, overdrafts, credit cards, and loans received appropriate treatment. As a consequence, TSB has compensated a substantial £99.9m to 232,849 affected customers.
The FCA highlighted that TSB’s inadequate systems and controls failed to provide fair outcomes for its customers, which led to the risk of agreeing to unaffordable payment arrangements and levying inappropriate fees. The regulatory body mandated an independent review in 2020 to investigate how the bank managed customers who fell into arrears.
“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,” FCA’s co-head of enforcement and market oversight, Therese Chambers, commented. She noted that while the bank eventually took corrective actions, it was only after the FCA initiated a review that TSB effectively addressed the issues.
In response to the findings, TSB has invested £105m in a comprehensive programme aimed at rectifying the failures identified and preventing future occurrences.
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