TSB Bank faced a major outage on Thursday, leaving customers unable to access their accounts as the app went down. This disruption coincided with the announcement of a £10.9 million fine imposed by regulators for the bank’s inadequate treatment of individuals in financial distress. The outage was first reported around 7 am on Thursday and persisted throughout the morning, with thousands of complaints received by 1 pm.
Acknowledging the issue, TSB posted on social media, expressing regret for the inconvenience faced by customers and assuring that their teams were working to resolve the problem. Customers took to social media platforms to vent their frustrations, citing difficulties in sending and receiving funds, with some criticising the bank’s consistent technical issues and lack of rewards for long-time clients.
The outage compounded TSB’s challenges for the day after being penalised by the Financial Conduct Authority for six years of unfair treatment towards customers experiencing financial hardship. The bank has compensated over 230,000 affected customers with nearly £100 million in redress for issues related to mortgages, overdrafts, credit cards, and loans. The FCA highlighted TSB’s poor systems and controls that exposed customers to risks and failed to address individual circumstances when agreeing on repayment plans.
Therese Chambers from the FCA emphasised the importance of fair treatment for customers in vulnerable situations and criticised TSB for missed opportunities to rectify the issues. The regulator found that inadequate staff training and incentive schemes may have led to unaffordable payment arrangements and inappropriate fees being charged to customers. The FCA noted that although TSB became aware of system problems in 2016, effective action was only taken after a review in 2020.
Despite facing a potential fine of £15.6 million, TSB cooperated closely with the FCA to rectify its systems and compensate customers, leading to a 30% reduction in the penalty. The bank has invested £105 million in addressing the underlying issues and enhancing support for customers in financial difficulty. A TSB spokesperson acknowledged the historical problems, apologised to affected customers, and assured that comprehensive measures have been implemented to prevent such issues in the future.