The Financial Conduct Authority (FCA) has made public its intention to investigate the TSB jointly with the Prudential Regulation Authority (PRA), over the bank’s failed IT migration project and its lack of openness and transparency about the issues experienced, which saw up to 1.9m people lose online access to their accounts for long periods
In a letter to the Treasury committee’s inquiry into the TSB, FCA head Andrew Bailey made clear the regulator ‘has been dissatisfied with TSB's communications with its customers’.
Bailey said he had written to Paul Pester, TSB’s CEO, when the problems first emerged, warning him customer communications were perceived as poor, and saying this could reduce trust in TSB and in the banking sector as a whole.
Bailey said: ‘For example, TSB referred to "the vast majority" of customers being able to access their online accounts, at a time when there was a successful first-time login rate of only 50% on the web channel.
‘We reminded TSB of the need to communicate information on the services it was (or was not) able to offer to customers, in a way that was clear, fair and not misleading.’
In his letter to the committee, Bailey said Pester had given MPs ‘an optimistic view of the services’ and that ‘greater caution would have made sense’. Pester also had access to a set of slides putting across the initial assessment from IBM, which had been brought in to help sort out the problems, but which he did not share with the committee in detail.
In addition Bailey noted: ‘TSB have not met the requirement In the Payment Services Regulations to refund all relevant customers as soon as practicable and in any event by the end of the business day after the day which it became aware of the fraud.
‘We have had assurances from TSB that the backlog of cases will be resolved by early June, and we will continue to closely monitor progress. TSB's failure to meet the Payment Services Regulations will be considered as part of our close engagement with TSB on this matter.’
Commenting on the correspondence, Nicky Morgan, chair of the Treasury committee, said: ‘The regulator does not make such criticisms lightly. I am deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the committee.’
Bailey’s letter, and the ongoing problems faced by TSB customers, are to be discussed at a meeting of the committee later today when it sees Pester and other TSB board members, as well as the FCA.
Andrew Bailey’s letter to the Treasury committee is here.
Report by Pat Sweet
