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TSB waives overdraft fees and increases interest rate but customers still locked out

Chief executive Paul Pester refuses to commit to giving up £1.6m bonus over IT fiasco

Ben Chapman
Thursday 26 April 2018 15:37 BST
Some TSB customers are unable to access online accounts for a seventh day
Some TSB customers are unable to access online accounts for a seventh day (PA)

TSB is waiving all overdraft fees in April and has increased the interest rate on its main current account to 5 per cent, but half of its customers still can’t access online banking as an IT fiasco stretches into its seventh day.

Chief executive Paul Pester repeatedly refused to commit to waiving his bonus over serious failures that also allowed some people to view other customers’ financial details.

When probed on the BBC’s Today programme, the under-fire bank boss said that pay was the last thing on his mind.

When quizzed again on whether he would commit to forgoing the bonus, which could be as much as £1.6m, Mr Pester said: “That is a question for the board; for the remuneration committee.”

He admitted that the situation was “not good enough” and said that he was “putting things right”.

“Many customers may have used their overdraft in April more than they were expected to,” he said.

“They may not have been able to see their account or manage their account, so today we are announcing that there will be no overdraft fees or any overdraft charges for any of our customers through April.”

TSB also raised the interest rate on its Classic Plus current account from 3 per cent to 5 per cent.

The ongoing IT disaster began with botched upgrade work on Friday, but has developed into one of the worst technology failures to hit a UK retail bank and has left many of TSB’s 5 million customers furious.

Paul Pester, TSB chief executive, refused to say whether he would forego his bonus, which could be up to £1.6m (PA)

Some have fallen behind with bill payments while small businesses have suffered losses because they haven’t been able to pay suppliers.

Other customers said they were worried their money had simply disappeared when they could not see their accounts.

Mr Pester moved to allay those fears, saying that all of the bank’s payment systems were working as normal. He said those who had suffered losses should get in touch.

He also appeared to lay blame at the feet of TSB’s parent company, a Spanish bank called Sabadell, which had been providing the IT platform at the heart of the faults.

Four days after a new online banking system was due to be up and running, the chief executive said he would now take “direct control” of that platform.

“I have drafted in a team of global experts from IBM," Mr Pester said.

“That team of global experts will start working in Bristol, they will start working in London, they will start working across the UK. They will be reporting to me. I will take control of the platform until we get this fixed,” he said.

“I believe that four days in after launching a new platform, only having 50 per cent of our customers being able to access our website is not good enough, therefore I am putting things right.”

TSB’s problems stemmed from a switch to a new online banking system. The company had rented the technology behind its app and online banking from Lloyds Banking Group since the two companies split.

MPs demanded answers from TSB this week. Nicky Morgan, chair of the Treasury Committee, said on Tuesday: “The reports of unauthorised transactions, access to other customers’ accounts and failures of in-branch services have all the hallmarks of an IT meltdown.

“This is yet another addition to the litany of failures of banking IT systems. Potentially, millions of customers could be affected by uncertainty and disruption.

“It simply isn’t good enough to expose customers to IT failures, including delays in paying bills and an inability to access their own money.”

The Financial Conduct Authority said that it was “aware of the issue and liaising with the firm”.

A spokesperson for the Information Commissioner’s Office said: “We are aware of a potential data breach in relation to the TSB and are making enquiries.”

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