TSB under Fire: Bank Pays Millions in Fines Due to Inadequate Customer Service

The British bank TSB is under the spotlight of the financial regulator FCA after being fined £10.9 million. The reason: unfair treatment of customers struggling with financial difficulties. Between 2014 and 2020, TSB had inadequate processes that posed a potential threat to customer satisfaction and led to unrealistic repayment agreements. A particularly shocking case involved charging fees for a missed mortgage payment for a customer who was already deceased. Furthermore, customers facing payment difficulties were sometimes given bizarre advice, such as not buying clothes or school meals for their children. The news comes at a time when TSB's Spanish owner Sabadell is the focus of a hostile takeover attempt by BBVA, reigniting the debate about the future of the British bank. TSB was brought to the London Stock Exchange in 2014, with the aim of competing with established banks. The purchase by Sabadell occurred less than a year after the IPO. TSB has made efforts to respond to the criticism, emphasizing that all affected customers have been contacted to receive compensation. The bank has addressed the underlying issues and improved customer support. Nevertheless, TSB ranked among the lowest in an industry-wide survey of service quality last year. The FCA is becoming increasingly strict with banks that inadequately serve their customers and introduced a new 'Consumer Duty' regime in July 2023. TSB received a 30 percent discount on the fine due to their cooperation with the authority, which otherwise would have amounted to £15.6 million.