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TSB Refused Help From Lloyds Morning of IT Meltdown

Dominique Adams

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bank it failures

It has emerged that on the day of TSB’s recent IT customer migration fiasco the bank declined an offer of help from former owner Lloyds Banking Group.

On the day of the notorious IT meltdown, it quickly became apparent that TSB‘s customer migration process had severely gone awry. The bank was transferring its customer accounts from the Lloyds systems to its new Proteo4UK core banking system. According to a report in the Financial Times (FT), Lloyds contacted TSB on the morning of April 23 to offer its help but got the knockback.

The IT failure saw 1.9 million TSB customers beset with online and mobile banking woes for days afterwards. The bank has received more than 40,000 customer complaints. Some users are still reporting difficulties with their accounts. Problems included being locked out from their accounts and money disappearing from their online accounts, while some were even able to see other customers’ accounts.

Lacklustre Response from TSB

Rather than accept help from Lloyds when the scale of the problem was becoming apparent, it elected instead to wait a few days before engaging IBM to come in and fix the problem. Former TSB board member, Philip Augur said the cause of the meltdown was a combination of “human error, pride and software failure.” Adding that TSB had clearly underestimated the gravity of the situation and in the first week of the crisis had responded dreadfully.

Labour MP John Mann, a member of the cross-party Treasury select committee told the FT: “They (TSB) were playing fast and loose with the customers and also with their reputation, which has been so damaged by it now.” He commented that by refusing to accept help the bank was unwilling to knowledge the massive scale of the problem

It remains unclear how much this IT disaster will cost the bank, it has insisted no customer will be left out of pocket. The bank has tried to placate its angry customers by waiving overdraft fees and interest charges for its retail and small business customers for the month of April. It has also raised the interest paid out on its standard current account to 5% on balances up to £1,500 – up from 3% for existing customer who decide to remain with the bank.

 

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Dominique Adams

Staff Writer, DIGIT

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