TSB investigated by City watchdog on debt ‘treatment’

‘We are conducting a review to assess if treatment fell short of what is expected’

TSB is under investigation by the City watchdog over the treatment of customers struggling to make their loan repayments for the past seven years.

The Financial Conduct Authority (FCA) is examining whether the bank’s debt collection service “fell short” when supporting customers between 2013 and 2020.

Early findings from the review suggest TSB’S behaviour may have left some customers out of pocket, according to The Mail on Sunday.

The investigation, which is being carried out with the bank’s support, was launched last year and is expected to be completed in 2022.

TSB has put aside £55m to cover the costs should it be forced to pay out millions of pounds in compensation following a potential FCA fine.

Payouts are expected to be focused on the interest customers may have missed out on due to charges that should not have been applied.

It comes after the FCA hit Barclays and Clydesdale Financial Services with a £26m fine in December over their treatment of consumer credit customers that fell behind on loan repayments.

Barclays moved to “proac- tively redress” more than 1.5m customers with a payment of £273m.

Meanwhile, Lloyds Bank, Bank of Scotland and The Mortgage Business were also slapped with £64m in fines from the FCA in relation to mortgage customers struggling to make debt repayments.

A TSB spokesman said: “As we set out in our annual report in February we are currently conducting a review of customers who were in arrears to establish whether our treatment fell short of what they should have expected.

“The review is due to continue until 2022.”