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Fraudsters stole money from 1,300 TSB customers after IT meltdown

Fraudster exploited TSB’s botched IT migration to steal money from around 1,300 of the lending giant’s customers, CEO Paul Pester has admitted.

In a meeting of the Treasury select committee on Wednesday, Pester said that 70 times the normal rate of fraud alerts were recorded last month.

The chief executive vowed that customers would be fully compensated for the money that was stolen, and apologised for providing inaccurate information to the committee in an earlier appearance.

Pester had previously told the committee that the lender had set up a dedicated fraud line for customers and that they had only needed to wait a few minutes to report concerns.

But he said yesterday that he had not been aware of the extent of the delays affecting some customers. In some cases, customers were reportedly forced to wait up to nine hours.

The Financial Conduct Authority has opened an investigation into the fiasco, which left nearly 2 million customers locked out of their online accounts in April.

Customers were unable to access TSB’s online services or make payments after the lending giant migrated to a new digital platform. Some were also reportedly given access to others’ data.

In his first appearance before the committee, Pester said the vast majority of customers were still able to use TSB’s services. But in a letter to the Treasury Committee, FCA CEO Andrew Bailey has  described the claim as “an optimistic view of services”.

“In conditions of highly volatile service levels, any single number is less meaningful than when a service level ls stable, and in this case risked giving too positive a view,” Bailey wrote. “The numbers are arguable, but in my view greater caution would have made sense.”

TSB had been dependent on the digital platforms of its former owner Lloyds since the two companies split in 2013. Before migrating to its new platform in April, the lender had warned customers that its services would be offline until 6pm on Sunday. But technical issues caused customers to lose access for several days.