It also lacked suitable systems and controls to secure fair outcomes. TSB has paid £99.9m in redress to the 232,849 mortgage, overdraft, credit card and loan customers affected.

Between June 2014 and March 2020, TSB’s inadequate processes created a real risk that repayment plans were not realistic. Its training did not fully support its staff in understanding customers’ circumstances. Staff were potentially encouraged by incentive schemes to prioritise the number of plans made over taking enough time to assess individual customer circumstances.

As a result of its failings, TSB risked agreeing unaffordable payment arrangements with customers in difficulty or charging them inappropriate fees. This risked increased uncertainty and stress, including for vulnerable customers.

The extent of the failings were identified by an independent review into TSB’s treatment of customers who had fallen into arrears, which had been ordered by the FCA in July 2020.

TSB had become aware of potential problems with its collections and recoveries in December 2016. However, it was not until the review in 2020 that TSB took effective action to fully address them.

Therese Chambers, joint executive director of enforcement and market oversight, commented: “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 has worked closely with the independent reviewer and the FCA and has concluded a comprehensive programme to resolve these issues, costing £105m. The FCA continues to supervise all firms to ensure that they have suitable processes in place to support struggling customers.