Published: Fri, June 08, 2018
Markets | By Otis Pena

MPs have 'lost confidence' in TSB chief

MPs have 'lost confidence' in TSB chief

Paul Pester told MPs on Wednesday that the bank experienced 70 times the normal level of fraud attacks last month after a new IT system was introduced in April which some customers struggled to use.

Pester has faced a grilling from MPs over the crisis, which saw the bank's systems crash, leaving consumers and small businesses unable to access their accounts.

Mr Bailey said that TSB had not been open and transparent about the difficulties experienced by customers in the six weeks since it bungled the move of its IT system from Lloyds on to the platform of its new owner, Sabadell.

The FCA has criticised Pester for his "optimistic view" of the problem and said the bank had got themselves "in a hole and they have got to get themselves out".

The TSB chief executive is under mounting pressure to quit after MPs said the bank's board should give "serious consideration as to whether his position was sustainable".

The letter to Meddings stated: "The committee considers that the TSB board should give serious consideration as to whether Dr Pester's position as chief executive of TSB is sustainable".

She had written to Mr Meddings on behalf of the committee to say the MPs had "lost confidence in [Mr Pester's] ability to provide a full and frank assessment of the problems at TSB, and to deal with them in the best interests of its customers".

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Chair of the committee Nicky Morgan criticised TSB's public communications for being "complacent and misleading".

The FCA said TSB's poor levels of service may have affected customers' trust in banking, with Bailey saying: "A more straightforward recognition of what the situation was would have been helpful". "Whether intentionally or not, he has not been straight with the committee, and more importantly TSB's customers, about the scale, nature and severity of the problems at TSB, and of the bank's response".

The IT disruption has also led to a spike in customers being hit by fraud, and the bank has failed to meet regulations requiring immediate refunds for such victims, the regulator said.

The information was disclosed by the committee as it published correspondence with FCA chief executive Andrew Bailey.

It emerged further problems ensued after customers who were sent apology letters by the bank were inadvertently forwarded personal details of other TSB clients.

"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", a spokeswoman for TSB said ahead of Wednesday's hearing. "The important point is that this progress has been achieved under the leadership of Paul Pester, who continues to have the full support of the TSB board".

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