TSB turned down an offer of help from its former owner, Lloyds Banking Group, in the early stages of an IT meltdown that left up to 1.9 million online customers unable to access their accounts.
Lloyds contacted TSB on the morning of 23 April, according to a report in the Financial Times, after it became apparent that a transfer of accounts and customer information to a new IT system had gone badly wrong.
However, TSB declined the offer, despite the fact its customer information was being transferred from a Lloyds system to one designed by its current owner, the Spanish bank Sabadell. TSB was spun out of Lloyds in 2013 but had continued to pay for the use of its IT systems.
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Almost a week into the crisis, TSB drafted in a team from IBM to help solve it, after the chief executive, Paul Pester, admitted the bank was still not on top of the problems with the bank’s internet banking and mobile app.
John Mann, a Labour MP on the cross-party Treasury select committee, said TSB’s failure to accept help was a sign that it had failed to acknowledge the scale of the problems and had been “hoping to get away with it”.
“They were playing fast and loose with the customers and also with their reputation, which has been so damaged by it now,” he told the FT.
Four weeks on from the IT transfer, some customers were still reporting problems accessing their accounts and transferring money.
Michael Hogg (@Penderhogg)
@TSB Still problems with international payments and i need to get one through today….help!
May 15, 2018
It is as yet unclear how much the botched IT transfer will cost TSB. The bank has repeatedly insisted that no customer would be left out of pocket as a result of the chaos.
The bank has waived all overdraft fees and interest charges for its retail and small business customers for 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 customers who stick with the bank.
During a bruising evidence session before the Treasury select committee, Pester was accused by Nicky Morgan, the committee chair, of being “extraordinarily complacent” after he said the bank’s move to a new IT system had mostly run smoothly.
Pester has volunteered to give up a £2m bonus linked to the IT transfer, but he could still receive up to £1.3m in other bonuses for 2018, on top of a further £1.3m in basic pay, benefits and pension contributions.
Posts on TSB’s Twitter feed on Tuesday suggested the bank was still struggling to cope with the high volume of customer complaints.
aware that some customers have had difficulties making payments to their TSB credit cards. If you’ve not been able to make a payment when it was due we’ll make sure you’re not out of pocket and will cancel any late payment fees. 2/2 Sophie
May 15, 2018
Lloyds declined to comment.