Furious TSB customers are demanding to know how on earth the bank could have allowed such a catastrophic IT collapse to happen — and are now threatening to leave in their droves.
Today, the bank’s chief executive, Paul Pester, will be hauled before MPs to answer questions on why the bank left its 1.9 million customers locked out of their accounts for nearly two weeks.
Mr Pester, TSB’s chairman, and a representative from the bank’s Spanish owner, Banco Sabadell, will be grilled on what went wrong with the major computer system upgrade that caused the crisis, the extent of the failure, and how the bank will compensate customers whose personal data may have been compromised.
TSB chief exec, Paul Pester, will be hauled before MPs to answer questions on why the bank left its 1.9 million customers locked out of their accounts for nearly two weeks
Vast numbers of customers are threatening to leave TSB, fed up with being left in the dark. They say they feel ‘deserted’ and have lost trust in TSB, which they accuse of lying about the scale of the crisis.
The number of people looking to switch their current accounts has doubled since the chaos at TSB began, according to comparison site GoCompare.
But yesterday it emerged that TSB had tried to halt the transfer of customers out of the bank temporarily. It says customers are now free to leave again.
Anthony Bennett, 66, from Chorley, Lancashire, has branded the bank’s bosses ‘a disgrace’ and says that he and his wife Christine will be switching to a different bank as soon as possible.
Anthony, a retired administrator for the Open University, says: ‘We signed up to online banking last year because the cashback rewards and best interest rates are only available to paperless customers.
‘But last week I was at my laptop trying to log in to give our mortgage broker details of our incomings and outgoings and was locked out. It was embarrassing. I felt deserted as a customer. I couldn’t access my own basic information. The TSB bosses are a disgrace.’
Debbie Pateman, who is in her 50s and runs a lingerie shop in Castle Cary, Somerset, is also planning to leave TSB after being locked out of her account and left unable to pay her bills. When she tried to call TSB she received only a recorded message telling her to go to her nearest branch.
After driving 15 miles to a TSB branch in Somerton, she joined a queue of customers, but was informed the branch’s system was not working either and to return next week.
Debbie, who lives with her husband Martin, says: ‘Enough is enough. TSB needs to get this sorted. I joined TSB believing it was an ethical and community-based organisation, but this episode has shown that it is just part of a giant Spanish bank.’
Anger: Banco Sabadell chairman Josep Oliu was pictured enjoying VIP treatment at a tennis tournament
Another customer, Joanna Window, is also preparing to leave the bank after not being able to make payments for the past 12 days.
The only time she did get access to her account she found bizarre records showing her regular direct debits will be paid until 2099. But before she could transfer money, her online banking session timed out.
She says: ‘TSB’s reputation is in tatters. The bosses have lied to us over and over again saying the problem has been resolved. They just want to placate customers. All the faith I had in the bank has gone.’
Businessman David Singh says that he has been affected ‘mentally and physically’ by the stress of the TSB meltdown.
David, 57, who runs an IT company and lives in Peterborough, has been locked out of his personal and business accounts since the bank’s system crashed almost two weeks ago.
He says: ‘I have been bounced around the organisation and no one is helping. It’s outrageous, an absolute disaster — Paul Pester should resign. TSB does not deserve my business.’
So far, TSB has provided only a sparse outline of what has caused such a drawn-out crisis.
The problems stem from a failed switch-over from the IT system of TSB’s former owner, Lloyds Banking Group, to one owned by its Spanish parent company Sabadell.
TSB had been renting its existing system from Lloyds, but last year the cost doubled to £200 million. Moving to the new platform would save TSB around £100 million a year.
The changeover had already been hit by a series of delays, and an insider who works in the software team for Sabadell told Money Mail the bank still wasn’t ready when it went ahead with the migration two weekends ago. TSB denies this allegation.
Victims: Businessman David Singh, left, has been locked out of his accounts for almost two weeks while shop owner Debbie Pateman, right, has been left unable to pay her bill
The whistleblower says TSB bosses failed to appreciate that British and Spanish customers use online banking in different ways. It has taken around two-and-a-half years to build the new system, Proteo4UK.
The changeover was scheduled to start on Friday, April 20 at 4pm, and would be run from the bank’s Bristol office.
Two weeks earlier, the bank had told customers they would not be able to access online banking over the weekend and that there would be limited branch and phone services.
TSB says the transfer of 1.3 billion pieces of customer information to the new system was ‘a success’ and ‘balanced to the penny’.
So at 6pm on Sunday, April 22, it ‘pressed go’ to bring the new system back online.
But as staff in the bank’s Spanish headquarters toasted the success of the project — pictures have emerged online where they congratulate each other as ‘champions’ and a ‘hell of a team’ — customers in Britain began reporting problems.
Some couldn’t log into their account at all, while others said their money had vanished. Some customers even reported seeing the balances of strangers.
By Monday morning the bank’s system was in meltdown as customers who had not been able to access their accounts over the weekend tried to log in.
In branches, staff were unable to help customers as their systems were down, too.
The eight key questions TSB boss must answer
Comment by: DAN HYDE
The most infuriating part of the TSB computer fiasco is that customers have been left with no answers to basic questions.
A week-and-a-half after its IT systems went into meltdown, victims still say they have no idea what’s going on, or when the problems will be fixed.
Money Mail offered TSB the chance to explain how it could have allowed such a disaster to happen, but the bank merely sent us a briefing document outlining the facts we already knew.
Today, TSB boss Paul Pester faces a grilling by MPs. They must ask him eight key questions which keep cropping up time and again when we speak to customers:
- Where was the boss when TSB went down? Mr Pester spent months reassuring customers the computer upgrade would be a success. Was he in Bristol at the vital moment as the chaos unfolded a week ago last Sunday? Or was he at home raising a glass to a job well done?
- Who is ultimately responsible for this meltdown? Should the finger of blame be pointed at the Banco Sabadell bosses? Or was someone below Paul Pester at TSB giving him dud information that allowed the crisis to escalate?
- Why on earth was there no back-up plan? So much can go wrong in a major IT upgrade. A ‘plan B’ is vital. TSB clearly didn’t have one.
- Why didn’t TSB transfer accounts to the new IT system in stages? Computer experts who’ve worked at rival banks say it is normal to move data on to a new system in stages rather than all at once. That way, faults can be spotted and corrected without inconveniencing customers.
- When will this nightmare be over? For customers, this is the most urgent question, and it should be simple to answer.Yet even after bringing in tech boffins from IBM, the bank seems to have no idea when normal service will resume. No wonder customers want to leave.
- Why were customers told everything was fixed when it wasn’t? Many TSB customers say they feel misled by Paul Pester and his team. Surely the chief executive believed it when he said most services were working and was just badly briefed? His flip-flopping from apology to downplaying the crisis has only caused more anger.
- Who gave the green light for branches to shut early at the weekend? As this paper reported yesterday, union officials claimed lights were turned out in branches to deter irate customers.
- Will Mr Pester give up his bonus? Claiming it’s ‘not my decision’ — as he has done for a week now — is just a cop out.
One TSB worker told Money Mail: ‘It’s horrendous. The staff are at breaking point.’
In Sunderland, around 12 of TSB’s 450 call centre staff are understood to have walked out due to the stress of dealing with furious customers.
Meanwhile, customers faced waiting for more than 90 minutes to get through on the phones. No one was answering the flood of pleas for help on social media.
It was not until 10.02am on Tuesday, April 24, that TSB’s chief executive, Paul Pester, responded to the brewing crisis.
He said he had ‘resurfaced’ after working with his team as hard and as fast as they could to get services up and running. Since then, TSB has failed to get a grip on the problem. In the early hours of Wednesday morning, Sabadell, which is in charge of installing the new system, told Mr Pester that the problem had been fixed.
But by Thursday, half of customers still couldn’t get into their accounts. So Mr Pester brought in experts from IBM.
On Friday, Banco Sabadell executives, including chairman Josep Oliu and chief executive Jaime Guardiola Romojaro, were pictured enjoying VIP treatment at a tennis tournament being sponsored by the bank in Barcelona.
Meanwhile, British customers started reporting that they are being targeted by fraudsters posing as TSB bank staff. As Money Mail went to press last night, TSB claimed that more than half of its customers could access their online banking accounts, but refused to give exact figures.
TSB claims that it has identified 402 cases where customers saw other people’s details, and that these were typically held by family members.
The bank has pledged to waive all overdraft fees and interest charges, and will also raise the interest on its standard current account to 5 per cent on balances up to £1,500, increasing it from 3 per cent.
But for many customers TSB’s promises and the grilling before MPs today is too little too late.
How To Escape Bungling Banks
Whether or not you’re a TSB customer, other banks may offer you a better deal. It only takes seven days to switch, so if you’re fed up, try one of these top accounts . . .
IF YOU NEED BRANCH ACCESS
Major high street banks are closing branches at a record pace. RBS-NatWest has just announced 162 more closures.
Banks claim that we don’t need as many branches as more people are choosing to bank online and via their mobile phone.
But all it takes is a computer meltdown to illustrate how heavily we still rely on face-to-face banking.
Many towns and villages have been stripped of their last bank, or have only one left, so choice may be limited. There is also now no guarantee that the branch will stay open after you switch.
To find out if a bank has a branch near you, use the ‘branch locator tool’ on its website. Or enter the name of the bank and ‘branch finder’ into Google. If you don’t have access to the internet, call the helpline for new customers.
Some smaller names are bucking the trend and opening more branches. Metro Bank, for example, is now in 55 locations and is opening more all the time. Most are inside the M25 but there are branches in Eastbourne, Peterborough, and Swindon, and one is due to open in Bristol.
Britain’s biggest building society, Nationwide, is also opening branches in places such as Glastonbury, which was formerly abandoned by the big names.
Beleagured: TSB has had problems moving its online and mobile banking customers on to its new platform (Pictured: A branch in Shrewsbury)
REWARDS TO STAY IN THE BLACK
One of the most attractive features of TSB’s Classic Plus account is the 3 per cent interest on balances up to £1,500.
In a bid to keep customers following the IT crisis, TSB has pledged to increase its rate to 5 per cent from tomorrow. This is what it used to pay customers before cutting the rate in January.
The account also pays £5 per month to customers with two direct debits set up, and an extra £5 if they make 20 debit card payments a month.
Other accounts also reward customers in the black. Nationwide’s FlexDirect offers customers 5 pc interest on the first £2,500 saved for the first year, but it drops to 1 per cent after that. To qualify, you must pay in a minimum of £1,000 each month.
Once a customer, if you refer a friend who also switches to Nationwide, you’ll both receive £100.
Tesco Bank is offering 3 per cent interest on balances of up to £3,000 until April next year.
Customers can also get one Clubcard point per £8 spent on their debit card — or one point per £1 spent in Tesco.
To qualify, you must pay in at least £750 per month and set up three direct debits.
The Santander 123 account pays 1.5 per cent on balances up to £20,000 to customers paying in at least £500 per month, with two direct debits from the account.
The account also pays cashback on bills, including 1 per cent on water and council tax, 2 per cent on energy bills and 3 per cent on mobile, phone, broadband and TV bills paid by direct debit.
You can get also earn between 1 and 2 per cent cashback if you have a mortgage or home insurance with Santander. But watch out for the £5 monthly fee.
Santander also has a ‘Lite’ version with no interest on your balance but a smaller monthly fee of £2.
ONE TO AVOID AN OVERDRAFT FEE
Customers with a TSB Classic account are charged £6 a month plus interest for using their overdraft, regardless of whether they are overdrawn for one day or 30 days.
However, TSB allows you to go overdrawn by £25 interest-free, plus an additional £10 buffer before levying any charges.
If you regularly use your overdraft, switching to a different account could work out cheaper.
Some banks let customers use a certain amount of their overdraft before they are charged. First Direct offers its customers a £250 fee-free overdraft, while M&S Bank’s current account provides its customers with a £100 interest-free overdraft.
Nationwide’s FlexDirect account offers a fee-free overdraft for 12 months to new customers. After 12 months, it charges 50p per day.
You must have a good credit score in order to be accepted.
GIVING UP ON THE BIG BANKS
First Direct has been repeatedly voted best for customer service in polls by consumer group Which?, followed by Nationwide.
Customers say you never have to wait for someone to answer the phone, and any issues are always dealt with swiftly.
However, First Direct is a telephone and internet bank. You can bank cheques and pay in money at its parent bank HSBC or the Post Office, but you have to manage your account over the phone or online.
Alternatively, you could look to newer banks such as Monzo and Starling. You have to manage your account via a smartphone app.
The main selling point is the top-of-the-range technology which offers customers access to clever budgeting tools.
Starling Bank pays 0.5 per cent interest on balances up to £2,000, and 0.25 per cent on balances between £2,000 and £85,000. Up to £85,000 of your money is protected by the Financial Services Compensation Scheme as normal.
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS