Thousands of consumers leave Lloyds TSB bank after IT failure

Following the news that Lloyds TSB will be closing 49 of its branches, a recent IT failure could mean the bank is in even more trouble. The recent failure resulted in an estimated 10,600 incidents of fraud. Thousands of customers received fraud alerts on their accounts. The bank’s chief executive, Paul Pester, said that that 12,500 have been lost because of the issue.

In his second appearance in front of the Treasury Committee, he defended how the bank handled the problems. However, thousands of customers were locked out of their accounts online, and on their mobile and the group was “overwhelmed” by the number of calls and not able to assist their customers properly. Some customers also reported being able to access accounts that didn’t belong to them – which is a major security breach.

So far, there have been over 95,000 complaints from Lloyds TSB customers for a variety of issues, and despite hiring nearly 500 extra handlers, only around 25,000 have been resolved. Some customers have been waiting for hours to speak to the fraud line and there have been calls for extra call handlers to be hired to deal with the issue.

When commenting on the cases of fraud, Mr Pester told MPs: “I am deeply sorry to say that the issues we created as a consequence of migration were an opportunity for criminals to target TSB customers.” He also apologised to the bank’s customers and said they will do everything they can to rectify the issues caused by the incident. He added: “Money is not an object in resolving this situation. We are not limiting any sort of budget or allocation, we will pay what is required.”

FCA chief executive Andrew Bailey was also present at the committee meeting. He confirmed that the regulating body will be investigating the technical problems and taking action if needed. He added that the bank was cooperating with the investigating and “working very hard” to address the issues. He added: “They’re in a hole and they’ve got to get themselves out of that hole.”