Fines paid by lenders to the Financial Conduct Authority for failing customers are closing in on £1bn over recent years, with two substantial rulings handed down in this month alone.

Firms ranging from Barclays, Lloyds Bank, The Mortgage Business, HSBC and Marks and Spencer Financial Services have collectively been fined and had to redress customers hundreds of millions of pounds.

This month, digital lender Starling Bank was fined £29m for the “shockingly lax” screening of high-risk customers.

The regulator said: “This case took 14 months from opening to achieving an outcome – compared to an average of 42 months for cases closed in 2023/24.

“This is an example of how the Financial Conduct Authority is improving the pace of its enforcement investigations.”

Also, TSB was fined £11m for failing to ensure over 200,000 mortgage and other customers in arrears were treated fairly — and agreed with the watchdog to pay a further £100m package to correct its dealings with these borrowers.

Business services firm Rockstead says that in other Financial Conduct Authority cases, “the resultant cost of non-compliance is close to £1bn, without factoring in the cost of management time sorting out the mess, and doesn’t include the cost of misery and added stress for 4.5 million customers.

“Of course, this damages the firms’ reputation too, something that will be more significant in the ongoing ‘Consumer Duty’ world.”

Three other key fines handed out by the watchdog cover:

• HSBC and Marks and Spencer Financial Services fined £6m for failures to treat customers in arrears or financial difficulty fairly, between June 2017 and October 2018, and paid another £185m in redress to over 1.5 million customers – in May
• Lloyds Bank, Bank of Scotland and The Mortgage Business fined £64m for failures in mortgage arrears handling between April 2011 and December 2015, and then they paid out another £300m in customer redress to around half a million customers – in 2020
• Barclays Bank and Clydesdale Financial Services Limited fined £26m for poor treatment of consumer credit customers in arrears between April 2014 and December 2018, and paid close to another £273m in redress to around 1.5 million customers – in 2020

Rockstead adds: “Following the most recent Financial Conduct Authority lender fines, conversations with our business partners have been ‘off the scale.’  Everyone is shocked that collection teams are still getting it so wrong.

“FCA fines for the poor treatment of arrears and vulnerable customers is nothing new, and although they appear to relate to historic cases, be in no doubt, everyone is starting to question their own policies and procedures – again.”