7 June 2016: TSB was brand the 'Truly Shambolic Bank' by MPs yesterday after CEO Paul Pester made a second appearance at the House of Commons, revealing that at least 1,300 people had been defrauded following April's IT migration meltdown.
Pester also revealed that 12,500 people had left the bank since the failed system overhaul in April.
This platform migration was intended to shift accounts from the legacy system of former parent Lloyds Banking Group to a new setup operated by Banco Sabadell, who acquired TSB for £1.7 billion in March 2015 - less than two years after it had been floated off.
Almost two million people - more than a third of TSB's 5.2 million customers - experienced problems when making mobile and online payments as the result of a software failure, and the problems have still not been entirely resolved.
That was followed by a wave of claims of fraud from customers, some of whom watched hanging on the line to TSB's overloaded fraud department as their accounts were drained.
Pester admitted to MPs that at least 1,300 people had been defrauded, some of their entire life savings.
The IT problems have so far cost the bank £70m including £11.2m in compensation to customers who were affected by fraud, Pester told MPs.
Just prior to the Treasury committee hearing the bank had been roundly criticised by the Financial Conduct Authority (FCA) watchdog.
"The FCA has been dissatisfied with TSB's communications with its customers and we have had concerns that TSB was not being open and transparent about the issues experienced," Andrew Bailey, the FCA's chief executive, said in a letter to the Treasury committee.
"The current communications were perceived as poor, and could reduce trust in TSB and in the banking sector as a whole."
Bailey also said that TSB had failed to meet regulatory requirements of refunding all customers affected by the fraud "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".
"A more straightforward recognition of what the situation was would have been helpful," Bailey added.
A fortnight after the errors had become apparent, with online and mobile customers unable to log in or receiving error messages, Pester was still claiming that the migration had gone "smoothly" and blamed the organisation's IT meltdown on middleware "causing issues with the throughput of data".
MPS on the committee were scathing of the bank's over-optimistic attitude. Referring to the FCA's comments, chair Nicky Morgan said that TSB had "unfortunately earned the epithet ‘Truly Shambolic Bank'".
She continued: "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," Morgan said, adding that the levels of compensation have in many cases been insufficient.
A spokeswoman for TSB said: "We will be updating the Treasury select committee and will continue to fully support its inquiry. In the meantime, we continue to focus on doing whatever it takes to put things right for our customers, and ensuring that no customer will be left out of pocket as a result of the recent IT issues."
TSB has been working with IBM as it works to resolve the crisis.
Have you been affected by the TSB IT platform meltdown? Tell us in the comments below
1 June 2018: Hapless bank TSB has been criticised, once again, for sending letters of apology to customers over its recent IT platform meltdown addressed to the wrong people.
Customers have not only received letters of apology in their own name, but report that their envelopes have been stuffed with letters of apology addressed to other customers in a new blunder that will no doubt attract the attention of the Information Commissioner's Office (ICO).
TSB, meanwhile, has apologised but claimed that it has only affected a small number of customers.
The latest TSB mess-up has been revealed by customers on Twitter, with the popular MoneySavingExpert personal finance website alerted by readers. The bank claimed to be "aware" of the "issue" and blamed a third-party supplier.
@PaulPester any comments on how your company is handling customers data? Had a letter from @TSB today apologising for the delay in dealing with my complaint but you included a letter addressed to another customer #dataprivacy #fail— Mark Topps (@mark_topps) 30 May 2018
18 May 2018: Customers of TSB have complained that their accounts have been compromised, just weeks after the company's IT systems went into meltdown following a platform migration project that went awry.
According to MoneySavingExpert, the personal financial website set-up by journalist Martin Lewis, a number of customers have complained in recent days after seeing fraudulent activity on their TSB accounts. Furthermore, customers added that it took hours for them to contact TSB's fraud ‘hotline'.
One customer told MoneySavingExpert: "On logging on to internet banking I could see that all my savings and bills accounts had been transferred into my current account and then all those funds including my overdraft limit were transferred out.
"I called the TSB fraud line and it took me three hours to get through to them. Once through they freezed my internet banking and cancelled my cards and telephone banking - it was too late by then.
"I've called again this morning to chase and it took two hours to get through. Again, no update available. So I'm now in the situation that I have no money, no idea when I might get it back, no cards that work, no internet banking and no telephone banking."
Another wrote: ""I noticed that £9,000 of a loan that I hadn't applied for had appeared in my TSB account. I immediately tried to call TSB - however it took them four and a half hours to answer the fraud line.
"During this time, I watched as the £9,000 loan and £7,000 of wedding savings were transferred to different accounts. They have said I will hear back within a week."
Another suggested that their account had been emptied via internet banking, indicating that not only has the bank still not ironed out all the faults in its systems - effectively, the banking platform of its parent company Banco Sabadell - but that customer accounts are not secured.
That customer wrote: "We spoke to TSB yesterday, all our online and telephone banking is frozen and we're basically living off credit cards and a small amount of savings until TSB get back to us. They said it would be next week.
"Considering it took nearly four hours to even speak to them yesterday, I'm guessing they're short-staffed."
Equally, of course, it implies that they are inundated with complaints of fraud.
In a statement, TSB suggested that customers had been phished, rather than admit to any insecurity on their part.
"It is a sad fact that fraudsters might try to take advantage of situations like these. We are reminding customers not to click on any links or messages which they receive that they feel are suspicious," the bank said.
However, TSB customers responding to the MoneySavingExpert report have suggested that it still isn't possible to do something as basic as change passwords on TSB's new online banking platform.
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