TSB could lose £150m over ‘biggest IT disaster in British banking history’ as thousands of customers still struggle with accounts
TSB bank will "never be able to recover" the £150million it has lost from a costly IT meltdown, according to union bosses.
TBU, which represents 4,000 TSB staff, claims that the enormous cost is down to compensation payouts, fines from regulators and its damaged reputation.
Millions of customers were left locked out of their accounts thanks to a botched IT upgrade back in April, leaving them vulnerable to fraudsters using a nasty sim swap scam to steal their money.
The Treasury Committee, who've been grilling TSB bosses over the chaos, has now published three letters sent from TBU to the bank, and to MP Nicky Morgan who is heading up the investigation.
One of the letters dated May 3 was sent from TBU boss Mark Brown to Dame Sandra Dawson Chair of the Remuneration Committee at the bank.
He wrote: "The cost of this disaster, including the November delay, could be c.£150 million when you take into account compensation payments to customers, cancelling overdraft fees, increasing interest rates, fines from the Regulators, increased IT costs, the haemorrhaging of personal current account customers and lost future business.
"This is money which TSB will never be able to recover."
Mr Brown also slammed the disaster as leaving the TSB reputation "in tatters" and branded it "the biggest IT disaster in British banking history".
He claimed that during the meltdown, some branches were "teetering on the brink of collapse" while overwhelmed staff were working "12-hour shifts without breaks to deal with disgruntled customers".
During the first round of grilling from MPs bank boss Dr Paul Pester said he would sacrifice his bonus but he didn't rule out more general performance bonuses for other leaders at the bank.
In the letter, the union makes it clear that it is threatening legal action if these payouts go ahead.
TSB has appointed law firm Slaughter & May to carry out an independent investigation into the causes of the meltdown.
TSB meltdown: what are your rights?
IF you’re one of the potentially millions of customers affected by TSB’s online banking problems then here are your rights.
- Will your expenses be covered? If you suffer knock-on costs then the bank has confirmed it will reimburse you. Make a note of dates, keep reciepts and a log of how much you've been left out of pocket.
- What are the alternatives? Visit a branch or try telephone banking if you urgently need to access cash.
- Is it a data breach? The bank has denied that there has been a data breach but we've asked for more information on this and will update asap. Don't spend money in your account that isn't yours as you will be liable to pay it back.
- How to complain about your bank? Firstly, complain to TSB. If the problem is not resolved to your satisfaction after 8 weeks then you can complain to the Financial Ombudsman Service.
But Mr Brown accused the bank of trying to ";sweep its IT meltdown under the carpet" after it has said that it will not publish the findings in full.
In the letter dated June 20, the bank's chairman Richard Meddings told Ms. Morgan that it will "redact commercially confidential information" before the review is shared.
The bank previously promised to refund 1,300 customers who've been hit by fraud during the chaos, including those who've fallen for phishing scams.
Some customers have started receiving compensation after they were hit with late payment fees and unable to access their cash.
One frustrated customer told us how she was having sleepless nights after spending hours on hold, trying to report the fraud to the bank.
Another customer, Charlie Sweeney, staged a three-day sit-in at one branch because he was trying to find out what happened to his money after hackers left him with just £20 in his account.
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Scammers have been targeting TSB customers amid the chaos with phishing emails in the hope that they will hand over their bank details.
The latest blunder by the bank has left customers worried about their personal data after they received letters addressed to someone else.
The bank was also forced to apologise for yet another blunder after it emerged former customers found their direct debits had been cancelled and firms were apparently told they had DIED.
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