IT meltdown outfit TSB to refund all customers that fall victim to fraud in 'UK banking first'
After all, it has had a lot of practice in scam payouts
UK bank TSB has committed to refund any customer that ends up out of pocket to fraud as it makes a feature of the measure it had to introduce last year when hundreds were ripped off during its IT meltdown.
Customers will be refunded for any loss they suffer as a result of third-party fraud. At the moment, banks tend to only pay out in limited circumstances.
Announcing the move – which is described as a "UK banking first" – TSB said that one in four Brits had been affected by online fraud in 2018, and that some £1.2bn was stolen through bank fraud last year.
The bank is no stranger to fraud payouts – hundreds of its customers were left out of pocket as a result of its failed migration from its former parent company's systems to one set up by new Spanish owner Sabadell.
The week-long outage and subsequent smaller technical problems and general cockups – like sending customers letters containing other people's details – cost the bank £330m. That included £125.2m in customer compensation and £49.1m in fraud and operational losses.
The chaos led to a surge in scams as opportunistic criminals sent phishing calls, emails and texts asking users to verify their bank details, as well as using the more sophisticated method of SIM swapping.
Fraudsters with access to a TSB customer's account and personal details would ask that person's mobile provider to switch their number from one SIM to another, thus gaining access to 2FA codes. One business customer told El Reg last year that he had lost £12,500 this way.
The bank pledged to reimburse all customers who were a victim of fraud at the time so the new policy – called the Fraud Refund Guarantee – puts a positive spin on actions it already had to take by making it a permanent, long-term promise.
Meanwhile, the bank sent customers a message last week to say that it was slashing interest rates that were boosted as a sweetener to stop customers leaving TSB in the aftermath of the meltdown.
As of 2 July, the 5 per cent annual equivalent rate on the TSB Classic Plus account will fall to 3 per cent.
The bank last month announced that it was bringing control of its technology and banking platform in-house as it plans to shift away from Sabadell's IT partner Sabis. This will include setting up direct contractual relationships with third-party technology suppliers. ®
Sponsored: Beyond the Data Frontier