1,300 customers of Brit bank TSB defrauded due to botched IT migration
'There is no one who feels more for TSB customers than me' – CEO
TSB's boss Paul Pester admitted that 1,300 people have been defrauded as a result of the bank's botched IT upgrade in April, in a second hearing in front of MPs.
The Treasury Select Committee heard how some customers had tens of thousands of pounds drained from their accounts, while others had to wait up to nine hours on the phone to resolve issues.
Pester said the levels of fraudulent attacks increased 70 times, with scammers sending phishing calls, emails and texts purporting to be TSB and asking them to verify their bank details.
Financial Conduct Authority head Andrew Bailey, said there had been about 10,600 fraudulent attempts relating to the IT meltdown. TSB said it will compensate customers for any fraud they suffered.
"There is no one who feels more for TSB customers than me," a grovelling Pester told MPs.
Some 12,500 customers have switched away from TSB since the start of its IT problems.
Committee Chair Nicky Morgan said: "[You] have confirmed that the IT migration led to customers being fraudulently deprived of their money, which is a devastating experience.
"Life experiences such as weddings and house purchases have been ruined by what has happened. The stress has been immeasurable. The compensation offered is clearly absolutely inadequate and the problems continue."
She added: "Unfortunately you have earned the epithet Truly Shambolic Bank."
The woes began during TSB's migration to Spanish parent Sabadell’s platform on 23 April. Some six weeks after 1.9 million of TSB’s 5.2 million customers were locked out of online and mobile banking services, customers are still experiencing problems.
Up to 40 per cent of customers trying to contact the bank are still unable to speak to someone, and Pester said some branches are still not operating normally.
The hard pressed CEO said city law firm Slaughter and May is conducting an independent review of the incident, while IBM is helping the bank to identify what happened, fix the problems, and perform a review.
Following the migration, IBM was brought in to tackle the issues found in the middleware, Pester previously told MPs. However, the FCA's Bailey told MPs initial problems identified by IBM go beyond the middleware. Bailey added TSB had been working hard: "[TSB is] in a hole and they have got to get themselves out of that hole".
In a separate letter to the committee, Bailey accused Pester of painting "an optimistic view" of the debacle, adding that the FCA is investigating the IT migration.
"We do not normally make this information public, but given the level of public interest, I want to be clear that we will be conducting this work," the FCA said.
Morgan said it was the first time the committee had received a letter of that kind. ®