TSB probed over debt collection

TSB is being investigated by the City watchdog over how it treated a group of customers who fell behind on loan repayments between 2013 and 2020.

The Financial Conduct Authority has launched a review of support offered to customers by the bank’s debt collection arm over the seven-year period.

The review, which is being carried out in collaboration with TSB, started last year and is ongoing. An initial assessment has found TSB’s conduct may have left some customers nursing a loss.

The bank is preparing to hand out millions of pounds in redress and has warned investors ‘it is not yet possible’ to determine if it will be fined by the FCA.

TSB has already set aside £55million to cover the cost, which it expects to use over the next two to three years.

It is understood customers are not guaranteed a payout, but payments are likely to include compensation for interest customers lost out on due to incorrect charges.

The FCA fined both Lloyds and Barclays last year for failing mortgages customers in arrears.

A spokesman for TSB said: ‘We are 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.’ The FCA declined to comment.