It has been a month since TSB began a long-planned IT upgrade to move 1.3 billion customer records away from its old parent company Lloyds and on to a platform created by its new Spanish owners Sabadell.
But the move went disastrously wrong, with up to 1.9 million customers locked out of their accounts. And weeks later, Sky News has found the problems are far from over – with fraudsters exploiting the confusion to access customers’ money.
Ewan Monaghan, a teacher from St Albans, says he and his wife were among those locked out four weeks ago, for a few days – but then all appeared resolved. Until last week, when an overdraft letter alerted him to the fact that fraudsters had emptied his account, taking £20,000.
“It felt almost like a body blow really. I was very concerned we had lost everything,” he told Sky News.
Banking rules say TSB must refund fraudulent payments by the end of the business day after they’re made aware of the problem. But nothing can be done until customers have reported the issue – and that’s where Mr Monaghan ran into difficulties.
“TSB initially were reasonably helpful,” he says. “They managed to freeze the accounts we had, but after that I was told the only thing that could happen was to report to their fraud line which turned out actually to be completely impossible… I sent direct messages, I sent emails, I tried to phone head office, I tried almost everything to contact TSB and it turned out to be an impossibility… I was only able to make contact by going into a branch and refusing to leave at closing time ’til somebody took my call.”
TSB have now told him he’ll get his money back – but when Sky News spoke to him on Friday he was still locked out of his accounts.
“We’re at the point where our wages won’t be paid into the bank, our mortgage won’t be paid, our direct debits will crash and I’m going to be entirely reliant on handouts from the family,” he told us. “And I think that’s an unacceptable position for a bank to leave me in.”
A TSB spokesperson told Sky News they are “very conscious of the problems our customers may still be having with their banking and we absolutely want to put things right for them”.
As for Mr Monaghan, they said: “If problems persist on his account, we’d very much like to help him to ensure everything is put back to normal. No customer will be left out of pocket as a result of these issues… We have a specialist team dedicated to investigating the issues reported.”
Meanwhile, TSB’s chief executive Paul Pester has given up his bonus and the bank has brought in a consulting firm to work out how to compensate those affected.
But Mr Monaghan is far from alone – scores of TSB clients have been venting their anger online under the hashtag #tsbfail, many reporting losing thousands of pounds. Experts say such scammers often hone in on companies known to be experiencing IT problems.
“Fraudsters target certain organisations at certain times,” says Pauline Smith, the director of Action Fraud, the national cyber crime and fraud reporting centre. “They can have an increase of over 1,000% of what they’d normally experience.”
Action Fraud has received over 300 reports of emails, texts and calls from fraudsters pretending to be from TSB this month – 10 times as many as in April.
“We’re definitely seeing a rise in this type of scam,” says Ms Smith. “In April we took 20,000 reports of phishing and this month in May we’re predicting to be over 21,000. They use specialist software to look like they’re organisations, trusted brands. So if you look out for things like spelling and grammar, the images they send out particularly on email could be a bit fuzzy and they don’t quite look right. They’ll be asking you for details that are your details, so keep them to yourself.”
Mr Monaghan thinks the scammers got into his account during the chaos a month ago when TSB moved to the new system – saying he received no emails, texts or calls purporting to be from TSB and hadn’t clicked on anything suspicious.
But there are lessons to be learned from the episode for both customers and banks, says Philip Augar, an independent banking writer and former TSB non-executive director.
“TSB management I would imagine are regretting making this technology switch quite when they did,” he told Sky News, “But all of the banks will be looking at this very carefully. All of the banks face the issue of updating their technology and as technology develops and customer demands change, and they’ll be looking particularly carefully at the whole issue of cybercrime… All of them face a legacy of often quite outdated, quite complex systems which have really got sticking plaster all over them. They will all be looking at TSB’s experience and working out ways to avoid that.”