TSB Loses 12,500 Customers and Faces FCA Investigation After IT Failure
Financial Conduct Authority to launch formal investigation into TSB’s IT Meltdown suggesting the bank’s poor response has damaged public trust the financial sector.
It has been announced that The Financial Conduct Authority (FCA) will be investigating the bank’s disastrous customer migration, which has resulted in 12,500 customers deserting the bank. The FCA, dissatisfied with TSB’s communication with its customers, said that during the calamity there should have been more transparency from the bank.
Furthermore, the financial authority is unimpressed with TSB boss Paul Pester’s response to the crisis saying he was overly optimistic, too positive and ought to have shared more details about the problems with MPs on the Treasury Select Committee. It has also said that TSB has been too slow in refunding its customers who, so far, have been left out of pocket.
Pester, who has had to forgo his £2 million bonus, has been accused by the committee of failing to grasp the enormity of the situation, which left up to 1.9m digital banking customers without access to their accounts.
Ongoing Woes for TSB Customers
A month after the event, some TSB customers are still facing ongoing problems, with no real end in sight. While the situation has improved, 40% of those trying to call the bank are unable to speak to an operator, with waiting times of up to 30 minutes. To date, the bank has received 95,613 complaints relating to the failure and has only managed to resolve 24,094 of these.
TSB made yet another serious blunder by sending out letters of apology to the wrong customers, revealing their name, address and bank reference number. This mistake could see the bank also investigated and fined by the Information Commissioner’s Office (ICO), which has the power to hand out huge fines, as this is a serious breach of GDPR.
However, more worryingly is the increased incidence of bank fraud at TSB. According to Pester, the bank has been subject to up to 10,600 incidents of fraud. Left confused by the bungled manner the bank has handled the situation, customers have been hoodwinked into allowing unscrupulous individuals to access their accounts.
At his second committee hearing, a markedly more contrite Pester said: “I am deeply sorry to say that the issues we created as a consequence of migration were an opportunity for criminals to target TSB customers.”
No End Date in Sight
In his first appearance before MPs, Pester was unable to give a date as to when the issues would be resolved fully. However, he stated that: “Money is not an object in resolving this situation. We are not limiting any sort of budget or allocation, we will pay what is required.”
Andrew Bailey, FCA Executive said: “We do not normally make this information [the investigation] public, but, given the level of public interest, I want to be clear that we will be conducting this work.”
Nicky Morgan, Chair of the Treasury Committee said she was: “deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced, by its response to customer fraud, and by the quality and accuracy of the oral and written evidence provided by Mr Pester to the committee.”
A TSB spokesperson said the bank was “doing whatever it takes to put things right for our customers and ensuring that no customer will be left out of pocket as a result of the recent IT issues.”