MPs demand answers from TSB over online banking 'meltdown' following platform migration

TSB IT fiasco has "all the hallmarks of an IT meltdown", claims Treasury Committee chair Nicky Morgan MP

MPs on the House of Commons Treasury Select Committee have demanded answers from TSB over an IT meltdown this week, following an attempt to shift customers from Lloyds Bank's banking platform over the weekend.

The meltdown hasn't just affected online banking, but also in-branch services. It coincides with a shift to Banco Sabadell's own banking platform following TSB's £1.7 billion takeover in March 2015, less than two years after TSB was demerged from Lloyds Bank.

MP Nicky Morgan, chair of the Treasury Select Committee, has written to the bank's CEO, Paul Pester, to try to get more information for the causes of the meltdown.

The bank has been plagued with IT issues since the weekend, when the IT platform migration took place. A series of problems, though, locked out up to 1.9 million customers from online banking systems, as well as enabling users trying to log-in to online banking being able to see the account details of other customers.

Other customers, meanwhile, report erroneous account details, including someone who, overnight, apparently acquired significant arrears in their mortgages - which had also been re-denominated into US dollars.

It simply isn't good enough to expose customers to IT failures, including delays in paying bills and an inability to access their own money

TSB warned customers before the weekend that some of its online banking and money transfer services would be "unavailable" while it completed maintenance and upgraded its IT systems, which were once linked to its former parent, Lloyds Bank.

However, the window for the work, which was scheduled to run from Friday at 4pm to Sunday at 6pm, appears to have overrun into Monday morning, with the bank and its customers plagued by problems for much of this week

Morgan said the reports of unauthorised transactions, access to other customers' accounts, and failures of in-branch services "have all the hallmarks of an IT meltdown".

"This is yet another addition to the litany of failures of banking IT systems. Potentially millions of customers could be affected by uncertainty and disruption," she said.

"It simply isn't good enough to expose customers to IT failures, including delays in paying bills and an inability to access their own money.

"Warm words and platitudes will not suffice. TSB customers deserve to know what has happened, when normal services will resume, and how they can expect to be compensated."

Morgan said that she will also be writing to the Financial Conduct Authority "in due course" for their assessment of the issue.

TSB said on Monday that it was still suffering "intermittent issues" with its services, but didn't go any further than that. It also blamed "large volumes" of customers trying to access their accounts for not fixing it sooner, insisting it was "working as hard as possible" to restore the service.

Many customers - who didn't necessarily choose to bank with TSB but were transferred to it from Lloyds when it was demerged - have vowed to ditch the bank.

On Tuesday afternoon, meanwhile, the bank's CEO admitted to ongoing issues that it was still struggling to fix, suggesting that systems would not be working properly until today.