1,300 TSB accounts hit by fraud during IT failure

In a letter to Treasury Committee chair Nicky Morgan, TSB's CEO Paul Pester said that between the 23rd April and 31st May approximately 2,200 TSB customers experienced attempts to compromise their accounts and of these, around 1,300 have resulted in financial loss.

Pester said: "Although we were delayed in processing some refunds during the peak of the attack, we have caught up with this backlog and we are now consistently applying full refunds within one business day of a fraud being reported.

"Typically, criminals seize on any periods of significant change at banks to probe a firm's defences seeking signs of weakness. We planned for a quadrupling in the intensity of fraud attacks shortly after migration, and this assumption was prudent based on industry experience of significant IT changes.

"The disruption and confusion we caused for our customers by our migration, and the large amount of publicity this created, precipitated a phishing and fraud attack on TSB customers of unprecedented intensity."

Pester also admitted that the bank has to date received 95,613 complaints from customers as a consequence of the IT migration, with around 50% relating to access.

He said that TSB has so far resolved around 25% of these complaints.

Yesterday, Andrew Bailey, chief executive of the FCA, confirmed that the regulator will undertake an investigation into TSB's IT migration issues.

Bailey said the FCA is dissatisfied with TSB’s communications with its customers and has "concerns that TSB was not being open and transparent about the issues experienced".

Bailey also raised concerns that the failures "could reduce trust in TSB and in the banking sector as a whole".