TSB customers have spent their seventh successive day battling to access their accounts as the bank admitted the crisis could run into next week.
The bank’s boss, Paul Pester, said TSB will waive £10m in overdraft fees and pay extra interest on current accounts. He has hired a new team of IT experts from IBM who have been told the problems must be fixed by Saturday.
However, Jaime Guardiola, the chief executive of TSB’s Spanish owner, Banco Sabadell, said customers may have to wait until next week before normal service returns.
“We are on our knees,” Pester admitted in a BBC Radio 5 Live interview, adding: “We will get up and come back fighting.”
TSB chief forced to backtrack as online chaos continues
The Guardian has uncovered images on LinkedIn of IT workers in Spain who handled the botched transfer celebrating with sparkling wine and exclaiming “TSB transfer done and dusted!” and “Hell of a team!”. The pictures were posted just as the meltdown was beginning, and up to 1.9 million customers were subsequently locked out of their accounts.
More than a day after Pester declared: “Our internet banking and mobile app are back up and running”, around 50% of TSB online customers were still struggling to access their accounts.
Many reported hour-long waits to speak to TSB staff on the phone, while some of those able to get through online said passwords failed and they remained unable to complete transactions. Customers heading into TSB branches were told by some staff that it could be another five working days to completely clear all the technical faults.
The cause of the IT problems remains unclear. A spokeswoman for TSB said: “It’s really a bandwidth issue that we’re facing. On the mobile app, nine in 10 customers are getting through to us. On internet banking, one in two customers are getting through to us. The phones are certainly busier than usual but people are getting through.”
In a bid to prevent a mass exodus of customers, TSB said: “We will be waiving all overdraft fees and interest charges for all of our retail and small business customers for April. As a way of saying thank you to our customers for sticking with us, we’ll be increasing the interest rate on our Classic Plus account to 5% AER.”
But Pester rejected calls to resign or forgo his bonus, telling BBC Radio 5 Live: “I haven’t even had time to think about it.”
A rift has emerged between TSB in the UK and its parent company in Spain. The IT project, involving the transfer of 1.3bn customer records from TSB’s previous owner Lloyds, was managed from Spain, and Pester said he was told the issues were fixed, when they evidently were not.
He said he had taken personal control, with a team of experts from IBM arriving in Bristol yesterday morning to tackle the problem.
TSB had claimed before the botched transfer that switching customer records would save more than £100m a year. “A new, state-of-the-art platform designed and built with Sabadell … will reduce TSB’s costs considerably,” Pester said last year – but the bank now faces a ballooning compensation bill.
The first payouts to disgruntled customers have already begun. Two customers in Glasgow, Claire McAdam and Ian Roddie, were paid £40 after they were unable to access their TSB accounts to pay money owed on a separate credit card. Moneysavingexpert.com said the bank paid McAdam £15 to cover interest charged for delayed payments on her credit card and a further £25 for inconvenience caused.
If inconvenience payments to affected customers match the £25 paid to McAdam, the final bill will runs into the tens of millions.
A TSB spokeswoman said: “We will look into every query we receive. We’re also going through every tweet we see and [are] reaching out to customers.”
The Financial Conduct Authority has sent a team into TSB to monitor and assess the situation, while the Information Commissioner’s Office said it was continuing to investigate the issue.
HM Revenue & Customs said it would be understanding if small businesses cannot make payments because of the TSB IT meltdown.
Some business owners have warned that they cannot make cash transfers, such as VAT payments, because they cannot currently access their TSB accounts.
An HMRC spokesperson said: “HMRC will take the circumstances of TSB customers into account if asked to do so.”
The chaos at TSB has knocked nearly 10% off the share price at Sabadell since the start of the week, even though the bank reported first-quarter profits up 33% to €259.3m (£225.5m) on Wednesday.