TSB is hit by 10,600 fraud attacks after IT meltdown
2 million face chaos for weeks over TSB meltdown ‘Will you fall on your sword?’
TSB may has been hit by up to 10,600 fraud attacks by criminals following an IT meltdown at the bank.
Chief executive Paul Pester told MPs that 1,300 customers had lost money to fraudsters after the lender was the focus of an unprecedented assault on a British bank by organised gangs.
Mr Pester was forced to deny he planned to resign as politicians on the Treasury Select Committee slammed his failure to get to grips with the disaster. It came as:
TSB revealed the scandal has already cost the bank £70million
The lender said it had wrongly classified 370 people as dead after they tried to switch to another bank
It emerged letters containing highly sensitive financial information to the wrong people
The City watchdog vowed to hold those responsible for the fiasco to account.
A botched IT upgrade at in April left around 1.9million TSB customers unable to access their accounts. Fraudsters spotted an opportunity to profit with crooks posing as bank staff and offering to help customers before stealing all of their money.
Mr Pester said TSB experienced 70 times more fraud attacks than normal, and, with chaos already engulfing the lender, was quickly overwhelmed. As a result, some victims were on hold to the bank’s fraud team for as long as nine hours while their life savings were taken away.
He said that there had been 10,600 suspicious activity alerts on accounts since the attacks started. These would have led to texts being sent to the customers affected, with their accounts locked unless they responded to say it was a false alarm. It does not necessarily mean that they were all real fraud cases.
Around 2,200 customers had definitely seen efforts by criminals to access their accounts, with 1,300 of these cases resulting in financial loss to customers. They will all get their money back.
MPs told of customers who were sent other clients’ financial details in the post, and warned that some of the 12,500 people who have switched away from TSB were wrongly classified as dead, with the bank sending letters of notification to energy providers.
Mr Pester said this had happened to 370 people.
Labour MP John Mann said that one customer had told him she was paid just £100 after her wedding was ruined.
‘You’ve broken the law on data protection, you’re paying pitiful, embarrassing, cringe-worthy levels of compensation beyond any credulity,’ he said.
The response suggested ‘something fundamentally wrong at the heart of the leadership team,’ he added, and asked: ‘Will you fall on your sword before you are pushed?’
Mr Pester replied: ‘I don’t think anyone else would be as committed as me to fixing these problems.’
But he said the bank ‘will take whatever action is necessary’ after an independent report by law firm Slaughter and May is published.
TSB has been hit by around 94,600 complaints since the scandal erupted, and has paid more than 24,000 people back.
Mr Pester said he has hired around 2,200 extra staff to try and solve the crisis – which has so far cost TSB £70million in compensation, refunds, waived fees and other bills.
MPs also heard from Andrew Bailey, head of the Financial Conduct Authority watchdog, who vowed to take action against senior managers found to be at fault.