TSB chief executive Paul Pester has apologised “profusely” to customers who suffered fraud as a result of the IT problems that caused chaos for the bank as he appeared for a second time before MPs.
Mr Pester told the Treasury Committee that the bank was “overwhelmed” by reports of fraud from customers in the days after an IT migration went wrong, saying the bank saw an uplift in attacks 70 times the normal figure.
He said: “I obviously apologise profusely for this.”
The committee focused their questions on the ability of the bank’s fraud line to handle the influx of cases, noting some customers had reported waiting “hours” for help from staff, but Mr Pester said the phone line had cut wait times to two or three minutes.
Mr Pester apologised repeatedly as he appeared before the committee after a difficult first hearing on May 2 during which chairwoman Nicky Morgan described his evidence as “the most staggering example of a chief executive who seems unwilling to realise the scale of the problem that is being faced”.
Asked if he should take responsibility for many committee members feeling the way he had communicated to them was misleading, he answered: “I’m deeply sorry if you feel I have misled the committee. There is nothing that I’ve said that has not been said in good faith.
“Everything I have said to you I have said in good faith. Everything I have said to you I believe to be full and complete. And every piece of information I’ve provided to you is the best information I’ve had available at the time.”
When asked how much money was being put aside to sort the problems out, TSB chairman Richard Meddings said around £50 million had already gone to customers in fee waivers, compensation and/or in fraud refunds.
He said: “And if you want the rest of the cost number… in addition to that the incremental resources that the group has been bringing on… it’s around another £20 million. So year to date it’s about £70 million.”
Andrew Bailey, the head of the Financial Conduct Authority, which has announced it is investigating the IT migration, earlier told the committee that there were “frank conversations” with TSB about the way it communicated information about the meltdown.
Mr Bailey said: “A more straightforward recognition of what the situation was would have been helpful.”
Asked about levels of fraud, Mr Bailey told the committee: “We think there’s been something, I think it’s around about just over 10,000, 10,600 incidents and that has resulted in a level of payout.”
Ahead of the hearing, Mrs Morgan said she was “deeply concerned” about TSB’s communication around the problems.
Up to 1.9 million people using TSB’s digital and mobile banking found themselves locked out of their bank accounts following the migration of data on customers from former owner Lloyds’ IT system to a new one managed by current owner Sabadell.
Last month, Mr Pester told MPs on the Treasury Committee that he took “absolute responsibility” for the problems, but said the migration of billions of customer records was successful “to the penny” and the underlying engine of the bank was “working well”.