The financial regulator has slammed TSB’s handling of its IT meltdown hours before the bank is grilled by MPs for the second time, warning that 40% of calls were still being abandoned as recently as a week ago and fraud victims have not been repaid quickly enough.
Andrew Bailey, chairman of the Financial Conduct Authority (FCA), has written to the MP Nicky Morgan, who heads the Treasury Committee, to confirm the regulator and the Prudential Regulation Authority (PRA) are investigating the bank.
Bailey said the move would not normally have been made public but had been in this case due to the level of public interest. He tore into the bank over the ongoing problems, highlighting that as of 30 May 40% of calls were still being abandoned or disconnected before a customer got to speak to someone, and warning fraud victims should have been refunded more quickly.
Both the FCA and TSB will appear before the Treasury Committee at 2.30pm this afternoon for a second hearing into its IT meltdown. You can watch it on Parliament TV.
If you’ve been affected by TSB’s IT meltdown, see our TSB online banking problems guide for full help.
Get Our Free Money Tips Email!
What does the FCA’s letter say?
The letter, which was dated 30 May, was published this morning by the Treasury Committee. It included more details about the preparation which went into TSB’s migration of IT systems and the scope of the problems after. Here are some of the key points:
- 40% of calls were STILL being abandoned as of 30 May. TSB’s telephone system, which gets between 40,000 and 50,000 calls a day, was still experiencing problems, with 40% of calls being abandoned or disconnected before customers got to speak to someone. Wait times were over 30 minutes.
- Fraud victims have not been refunded quickly enough. TSB has not met the requirement in the Payment Services Regulations to refund customers as soon as possible or by the end of the following working day. The bank has said the backlog will be fixed by early June.
- There were STILL problems in branch. Bailey said some branch systems were not working, and while there had been improvements there were still operational problems.
- There are concerns TSB has not been ‘open and transparent’. Bailey said: “The FCA has been dissatisfied with TSB’s communications with its customers and we have had concerns that TSB was not being open and transparent about the issues experienced.” He said at the time when TSB said the “vast majority” of customers could log in, the first-time log in rate was only 50% online.
- There were problems with account switching. In the first week of the IT problems the acceptance of switch requests fell to 55%, but recovered to rise to more than 85% the following week.
Up to 400 customers could see other accounts. In the first few days some customers could see accounts they should not have been able to see. This was reported to the Information Commissioner’s Office.
Bailey said at any one point up to 14 FCA or PRA employees have been in the TSB offices monitoring the situation.
TSB chief exec ‘portrayed an optimistic view of services’
Bailey was also asked whether TSB’s evidence to the Treasury Committee has been consistent with the FCA’s view of the situation.
He said: “The FCA has no reason at this time to believe that TSB intentionally made misleading or incorrect statements to the committee.
“However, we do consider that the CEO [Paul Pester] was portraying an optimistic view of the services, for example by noting that the majority of TSB customers could transact as normal.
“The reason for this judgement is that in conditions of highly volatile service levels, any single number is less meaningful than when a service level is stable, and in this case risked giving too positive a view. The numbers are arguable, but in my view greater caution would have made sense.”
In response to the letter, Morgan said: “The regulator does not make such criticisms lightly. I am deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the committee.”
What does TSB say?
A TSB spokesperson said: “We look forward to updating the committee on the work TSB has undertaken to resolve problems for customers since our last appearance.
“We recognise that we have more to do to restore the bank’s operations to the level that customers expect and are completely focused on that and ensuring customers are not left out of pocket.”