UK BANKING WATCHDOG the Financial Conduct Agency (FCA) has confirmed it will probe TSB's botched IT systems upgrade as customers enter their seventh week of disruption.
Andrew Bailey, chief executive of the FCA, confirmed the investigation in a letter sent to Nicky Morgan, the head of parliament's Treasury select committee, in which he slams TSB CEO Paul Pester for "portraying an optimistic view" of the banks borked services.
Baily, highlighting Pester's claim that "the vast majority" of customers were able to access their online accounts at a time when there was a successful first-time login rate of only 50 per cent, said the FCA had been "dissatisfied with TSB's communication with its customers".
He argues that TSB was not being open and transparent about the issues experienced, adding that the bank's response "could reduce trust in TSB and in the banking sector as a whole".
Bailey also slammed TSB for failing to meet requirements to compensate customers quickly enough, adding that 40 per cent of calls to the bank were abandoned or disconnected, while wait times to speak to an agent had at times been longer than 30 minutes.
"The regulator does not make such criticisms lightly. I am deeply concerned by TSB's poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the committee," Bailey concluded.
Responding to Bailey's comments, Nicky Morgan, chair of the Treasury committee, said she was "deeply concerned" by TSB's failings.
"The regulator does not make such criticisms lightly. I am deeply concerned by TSB's poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the committee," she said.
"The committee will discuss Mr Bailey's letter, and the ongoing problems faced by TSB customers, when it sees Dr Pester and other TSB board members, as well as the FCA, on Wednesday."
A TSB spokesperson said the bank continued to keep customers updated on its latest service status, adding: "We will be updating the Treasury select committee [on Wednesday] and will continue to fully support its inquiry.
"In the meantime, 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."
TSB's IT meltdown, which stopped as many as 1.9 million customers from accessing their accounts, started after it transferred customer data from an old IT system controlled by its former owner Lloyds Banking Group in April.
The new platform, built by Sabadell, proved to be unable to cope with the volume of customers trying to access it when it went live.
The bank's latest blunder has seen TSB send out letters to customers containing the name and address of other account holders, which could breach the EU's new GDPR privacy rules that came into effect last month. µ
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