TSB crisis: Customers get compensation, as IBM experts fly in - as it happened

Graeme Wearden

from on 2018-04-26 18:49 (#3NQ09)

Experts from IBM are trying to fix the problems that have dogged TSB's internet banking service, but it could take several days

7.49pm BST

Time for a recap:

The IT crisis at TSB Bank is heading towards its eighth day, as the company continues to struggle to fix problems created by a botched IT migration last weekend.

"We are on our knees, we will get up, and come back fighting".

7.32pm BST

Our latest news story on the TSB crisis is now live. Here's a flavour:

TSB customers have spent their seventh successive day battling to access their accounts as the bank admitted that the crisis could run into next week.

The bank's boss, Paul Pester, said TSB will waive 10m in overdraft fees and pay extra interest on current accounts. He has hired a new team of IT experts from IBM who have been told the problems must be fixed by Saturday.

7.21pm BST

Our financial editor, Nils Pratley, writes that relations between TSB and its Spanish parent company look rather tense this week....

Let's try to be generous to Paul Pester, TSB's beleaguered chief executive. His handling of the fallout from the botched IT "upgrade" has been poor - some of his statements and tweets have been nonsensical, others have been factually wrong - but it is already clear that the primary blame for the fiasco itself lies in Spain, at the door of Banco Sabadell, TSB's parent.

He should have made the gesture, but he may be wondering if the internal blame game will end with his exit and the usual contractual wrangles. The head of an overseas subsidiary usually makes a suitable fall guy.

6.29pm BST

Here's a round-up of stories from TSB customers this week:

6.14pm BST

Paul Pester has told the Daily Telegraph that he doesn't yet know exactly what has caused this week's IT meltdown, preventing an army of customers from accessing their accounts online.

Asked what the specific issue was, he said:

"That's why I have got IBM here.

"We have two datacentres, miles of fibre-optic cable and several layers of software. Somewhere among that architecture are issues causing capacity constraints.

5.42pm BST

Richard Brittain, the TSB customer who set off today to close his account (having borrowed the petrol money from a friend), has got back in touch.

Richard ended up speaking with TSB's Kent area manager - and learned that they think it might take another five working days to clear all the technical problems.

It was actually refreshing to talk to someone senior enough who could actually deliver solutions, rather than focusing on the problems.

I must say, TSB need to not only compensate their customers, but they also need to recognise their staff who have been a real asset. All of the staff I have come across are genuinely sorry and they really are trying their best to help.

5.24pm BST

TSB has been churning out some alarming error messages this week -- baffling customers with talk of BeanFactories (to do with programming language Java) and NullPointerExemptions ( \_(af)_/ ).

IT expert Simon Needham suspects that the bank's user authentication processes aren't scaling properly -- which is why half its internet banking customers aren't getting into the service.

TSB are popping up errors only a techie should ever see right up into the UI for users to read. This has a really bad smell to it. I listened to the TSB CEO @paulpester on @BBCr4today and reading between the lines it appeared he was saying their user auth wasn't scaling. https://t.co/FceSNza3Np

TSB are having fun. pic.twitter.com/tYl0WEKUKM

5.01pm BST

Bradley Post, managing director of Rift Tax Refunds, says TSB customers should certainly pursue the bank for compensation, and tell HMRC of any problems too.

Small business using TSB may struggle to pay HMRC due to the recent problems the bank is facing with their IT systems. The good news is that HMRC will take the circumstances into consideration, however, customers need to record the problems they have encountered so they can put a case together and ensure they do not pay more than they should.

The bigger issue now is how customer opinion will change for TSB with some people choosing to sort their finances elsewhere.

4.33pm BST

Claire McAdam and Ian Roddie's 40 compensation is dwarfed by the bills which some small businesses may claim from TSB.

For example, tiler Phil Rooney told BBC Hereford and Worcester that the chaos had already cost him thousands as he was unable to pay staff from his account.

We've had staff walk out on us, sub-contractors, tilers, electricians, because we're not in a position to be able to pay them by the internet payments that we usually use so it's cost us so far 2,000 this week."

3.48pm BST

Moneysavingexpert.com is reporting that the first compensation payments are already going out to customers who have complained.

It said Claire McAdam and her partner Ian Roddie from Glasgow have been paid 40 compensation after McAdam was unable to access her bank account online or make a bank transfer from her account to repay money she owed on a credit card.

A TSB customer who complained to the bank just a couple of hours after its IT meltdown started has been paid 40

3.38pm BST

Broadcast journalist Natalia Crawford of Radio Clyde News has tweeted about the "absolutely disgraceful" situation which TSB customers such as herself are suffering:

@TSB Card declined three times while trying to pay for petrol this morning, made to feel like criminal, completely embarrassed. Managed to lift the cash at a nearby machine to pay but the withdrawal hasn't come off my account balance. How am I supposed to keep track like this?!

Due to be paid tomorrow. Spending my day panicking that something will go awry. My partner and I both bank with you. Will we be able to pay our rent?! Absolutely disgraceful that your customers are having to spend their days frantic and worried!

Not to mention the fact that when you try to phone, the automated service hangs up on you! You were able to email and text me to tell me about the planned works so why am I having to keep checking social media for updates now??

3.18pm BST

Britain's tax authorities have told us that they will understanding if small businesses cannot make payments to them because of the TSB IT meltdown.

Some business owners have warned that they cannot make cash transfers, such as VAT payments, to the authorities because they cannot currently get into their TSB account.

"HMRC will take the circumstances of TSB customers into account if asked to do so."

I still can't log into my #Tsb business account. I will now be charging #Tsb for everyday I can not log into my account. I have a VAT return looming and people to pay. #tsb are lying to the media about being up and running. #TSBfiasco #tsbdown #tsbfail

No, it's NOT!!
1) How do I pay my VAT?
2) How do I pay my deposit for a new house?
3) How do I pay salary?

Seriously???

2.41pm BST

Just in: Paul Pester has told ITV News that IBM team of experts must fixed TSB's problem by Saturday.

That suggests that the bank expects services to remain disrupted until then, but is perhaps hoping to recover by the start of next week (which chimes with Sabadell's comments)

The CEO of @TSB, @PaulPester, tells @itvnews the @IBM team he's brought in have until Saturday to sort out the Bank's IT problems. He declined to say he'd decline a bonus, if offered one.

2.37pm BST

TSB customer Penny Simpson still cannot log into her account online - despite TSB's claim that things are running smoothly for the vast majority of customers.

She reports that TSB refuses to accept her User ID and password. When she clicks 'forgotten User ID', the bank sends her.... her old log-in details, and says they are now clear to use.

This is like saying the kitchen's cooking up a storm but the restaurant can't get any food.

I'm sick to death of Paul Pester and his shambolic communications. And, most of all, I'm sick of TSB using the word 'some' as if this is a handful of customers. It isn't; it's millions.

2.06pm BST

TSB's Classic Plus pays interest on the first 1,500 of money in the account.

So, raising the interest rate on balances from 3% to 5% is actually only worth 30 to a customer per year, or 2.50 per month.

Interesting update on #TSB woes. The rise in interest from 3 to 5% takes effect from 2 May and seems to be indefinite (or maybe until we all forget about what's happened!) So you get an extra 2.50 month if you have the full balance in your account. Worth staying for?

1.48pm BST

Getting back (briefly) to the European Central Bank meeting in Frankfurt....

ECB chief Mario Draghi has warned that global risks such as protectionism have risen - a clear nod to Donald Trump's trade spat with China.

Draghi is being the adult in the room. Where pundits get carried away by the recent slowdown in Eurozone data, Draghi reminds us of the recent above trend economic growth. Solid.

1.22pm BST

TSB customer Richard Brittain has has enough of TSB - he's on his way to his local branch to close his account, having borrowed money from a friend to pay for the petrol.

He tells me that he's made 13 calls to TSB, only to be disconnected after waiting for up to two hours.

I am now going into town to get all my money out. TSB have now told me they need 7 working days to fix my current account.

I don't think enough is being done to report these issues to TSB. Their number is just constantly engaged, and when you do get through they cut you off after a 2 hour wait in the queue.

I have been without access to my bank since Friday... and now we're being asked to wait even more! Time to move to a better bank! I'm 400 down at the moment, all because of TSB.

1.05pm BST

Back to TSB, and Paul Pester has just tweeted a reminder of this morning's announcement:

Whilst the underlying platform is working well, it's unacceptable that it's taken this long to fix the problems some customers are having accessing their accounts. To begin to put things right we'll be waiving all overdraft fees and interest charges for our customers for April.

I've agreed with the Sabadell Chair that I will take responsibility for our IT platform. I've drafted in experts from @IBM to get to the bottom of the issues and fix them.

Also, as a way of saying "thank you" to our customers for sticking with TSB through these issues, we're increasing the interest rate on our Classic Plus account from 3% to 5% from 2 May.

I want to reassure our customers that no one will be left out of pocket as a result of these issues. If you're still experiencing issues please contact us via our website https://t.co/Ob2A6rrd5A

12.59pm BST

In other banking news, the European Central Bank has just voted to leave eurozone interest rates unchanged at 0.0%.

It also repeated its promise to keep buying government bonds until at least the end of September, or until inflation has risen sustainably close to its target.

Euro is little changed as ECB maintains promise to move slowly in removing stimulus https://t.co/GH0ajPLgIV pic.twitter.com/9woz9zBnze

11.43am BST

Several more TSB customers have told us that they intend to close their accounts.

David Green, 39, is the owner of a plant and machinery hire company in Birmingham and thinks heads should roll for the mess:

"It's an absolute disgrace. How can I run two businesses with staff and suppliers who require paying from day-to-day? Some suppliers are refusing to serve us services as we cannot pay like we always have done. It's not their fault, I wouldn't expect them to, but it's diabolical that we've been left like this.

It's ruined my business week completely. I have staff who think we can't afford to pay them. We have suppliers who think we are making excuses. I have to keep sending screenshots to people that question me. How embarrassing for a company which will turn over 10 million this year! How can I operate like this? Sackings should happen and the guy at the top needs to join the real world.

"I've tried to log in however TSB doesn't recognise my password! The robotic repetition of apologies and responses on their website are so mind-numbingly bland and unhelpful. I've actually just come back from the bank where I tried to pay my rent and it didn't go through. Their advice was to just: "Keep trying". As soon as this is over I will be switching my bank. "

"I can honestly say that since the weekend it has been a nightmare. I urgently needed to transfer funds to top up my smart meter (as I'm on prepay) but after 40 minutes on hold to TSB the line was cut.

Having no choice I stupidly tried numerous times with the same outcome. In sheer anger I clicked on their status report and the final insult was a message saying that TSB have restricted some selected customers. What the hell? If I ever get to talk to anyone at TSB it will be to close my accounts and transfer all my money."

11.27am BST

TSB's pledge that no customer will be left out of pocket as a result of the fiasco will come with a hefty price tag.

The bank estimates that its decision to waive all overdraft fees and interest charges in April, as well as raise the interest rate on its 'Classic Plus' account to 5% from 3%, will cost an estimated 20m.

10.59am BST

The Times is reporting that TSB was warned that its IT migration would flounder unless it spent more money.

It says:

A TSB adviser warned the bank against embarking on a major internet upgrade on the cheap, The Times can reveal.

Consultants raised concerns in 2015 that the bank was not setting aside enough money for the "incredibly complex" project to move customers to a new online system.

TSB fiasco was avoidable and caused by bank embarking on major IT upgrade on the cheap. My exclusive today. https://t.co/bkh1UU9159

10.50am BST

Radio 5 Live have uploaded their interview with Paul Pester, in which he admits TSB is on its knees and promised to compensate customers from losses suffered through this week's mess.

10.30am BST

TSB's efforts to placate its customers by waiving overdraft fees and boosting its current account interest rate has come too late for some customers.

Mark Ellison tells us that he's moving his account to Metro Bank "with a heavy heart", as he had previously worked for TSB for five years.

@graemewearden Finally managed to access my @tsb internet banking and empty the account. The relief is off the scale, now to see how they deal with the complaint

9.37am BST

IBM's team of experts have no time to waste -- TSB customers are continuing to report problems with their accounts.

Nope. App still incredibly slow and none of my transactions are showing pic.twitter.com/348rKJULXF

App won't recognise my finger print, I have to go through the entire set up process as won't let me log in with my memorable information, had to transfer money from another account for outgoings over the last few days as I couldn't get online to track them NOT good enough #tsb pic.twitter.com/dARlQnQ0KC

Really? pic.twitter.com/zC2kLj4UZV

9.23am BST

TSB's Spanish parent company has warned that services might not be back to normal until sometime next week!

Jaime Guardiola, the CEO of Banco Sabadell, told analysts this morning that the migration onto its IT kit (from TSB's previous owner, Lloyds) had been problematic:

"Fixing the problem took more time than expected and we were not able to reopen access until Wednesday. I expect next week we will reach something very close to normality,"

"We will make sure that no customer is left out of pocket and we are asking customers to file complaints that will be processed.

9.15am BST

Waiving overdraft fees is a good start, but it won't tackle all the losses suffered by TSB customers this week.

People could be hit by late fees, for example, if they fail to meet credit card bills or other loan repayments.

I would expect nothing less. But TSB account holders are also going to be be hit with default fees from creditors who haven't received their monthly payments on time. Surely, we need a sector approach to this? https://t.co/05iIEEhyFG

8.54am BST

The decision to call in IBM tech experts to tackle TSB's IT problems suggests that the problem is bigger than the company realised and may take several days to fix.

Remember, at 3.40am yesterday Paul Pester was confidently tweeting that things were 'up and running' again -- something that is going to haunt TSB chief for a while.

"I will take direct control from 8 o'clock this morning for our platform, I've drafted in a team of global experts from IBM.

They are reporting to me, directly to me and I will take control of the platform until it gets fixed. I am putting things right."

#TSB CEO Pester tells me on #r4today that he's taking personal control of IT debacle (from parent co Sabadell), may take days to sort, is waiving overdraft fees & will compensate but won't say if will forego bonus

8.26am BST

8.25am BST

Q: Were you warned last week that you weren't ready for this IT migration?

We were ready for the platform switch, CEO Paul Pester insists. TSB expected some turbulence, but no-one expected the issues that have hit the bank since the weekend.

8.17am BST

Paul Pester is now being grilled on Radio 5 Live over TSB's IT mayhem.

Q: Why didn't you give more information to customers, and claim that everything was fixed when it wasn't?

This is a fight worth fighting. TSB was created to bring more competition into UK banking.

#TSB boss Paul Pester has told us @bbc5live that businesses that have suffered consequential losses as a result of the IT crisis, do have a case for compensation, and the bank won't be penny-pinching.

7.59am BST

Asked whether he would be giving up a potential 1.6m bonus, Pester told BBC Radio 4 that it was a matter for the company:

"The last thing I'm worried about at the moment is bonuses and pay. I'm focused on putting things right for customers. It's not my decision, that's a focus for them [the board]. It's a decision for the remuneration committee."

7.55am BST

Speaking on Radio 4, Paul Pester says he has taken control of TSB's IT platform himself - to tackle the problems that mean only 50% of its customers can get online.

@TSB bank boss Peter Pester says he has drafted in IBM experts to fix the online banking problems. They will get to work today to get to the bottom of the problems, he tells #r4today

7.50am BST

NEWSFLASH: TSB has announced that it will waive all overdraft fees and interest charges for retail customers and small business owners for April, as it tries to assuage the anger over its IT meltdown this week.

#TSB says: "We will be waiving all overdraft fees and interest charges for all of our retail and small business customers for April. We'll be increasing the interest rate on our Classic Plus account to 5% AER."

As we moved over to our new banking platform last weekend, the landing was an incredibly bumpy one for our customers, and for that I am truly sorry. This is not the level of service that we pride ourselves on providing - nor is it what our customers have come to expect from TSB....

"Of course, customers can rest assured that no one will be left out of pocket as a result of these problems. To begin to put things right, we will be waiving all overdraft fees and interest charges for all of our retail and small business customers for April.

Nope. App still incredibly slow and none of my transactions are showing pic.twitter.com/348rKJULXF

7.31am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

One of Britain's worst IT botches of recent years continues to rumble on today. TSB customers are still reporting that they can't access the bank's online systems, nearly a week after they were taken down for a planned IT migration.

European Markets Opening Calls
FTSE100 is expected to open 6 points higher at 7,385

DAX is expected to open 50 points higher at 12,472

CAC40 is expected to open 22 points higher at 5,435

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