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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jun/06/tsb-boss-faces-mps-it-meltdown-fca-criticism-paul-pester-business-live
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| TSB says 1,300 people lost money through fraud since IT meltdown - business live | TSB says 1,300 people lost money through fraud since IT meltdown - business live |
| (35 minutes later) | |
| In her closing remarks Morgan says unfortunately the saga goes on. The FCA letter says ... TSB has not been open and transparent. The committee cannot remember such a letter from the FCA. | |
| She says, you have confirmed the IT migration has lead to people being fraudulently deprive of their money, life experiences such as weddings and house purchases ruined, the compensation is absolutely inadequate and the problems continue. | |
| This cannot be something you want, ultimately it is not only damaging to TSB but also to other banks in the sector and to online banking. | |
| Unfortunately, although we are grateful to you for your time... it did take an hour and half for you to thank your staff. | |
| I suspect we will ask you to come back again, because we will be keeping a very close eye on what is going on to put all of this right. | |
| Question: will it look at culpability of individuals and the role of the Spanish bank? | |
| Meddings says it will look at the relationship with the platform supplier. | |
| Question: what is the scope of the instructions to Slaughter and May? | |
| Medding says we can provide the terms of reference. The reason it’s a law firm is that part of the terms is about the governance around the decision made to migrate. | |
| Question: how many people have switched to TSB? | |
| Pester says we have not been attracting many new customers to our current accounts. | |
| Morgan asks how much overtime are staff having to do in branches? | |
| Pester says he can’t give figures. Branch transactions are taking longer than we would like. Branches are not operating normally. | |
| Morgan says some of the fraud is done with sim cards so is TSB in contact with the mobile companies? | Morgan says some of the fraud is done with sim cards so is TSB in contact with the mobile companies? |
| Pester says yes they have been. | Pester says yes they have been. |
| Morgan says there are people trying to call the fraud line and have waited 15 minutes and 27 minutes and given up. | Morgan says there are people trying to call the fraud line and have waited 15 minutes and 27 minutes and given up. |
| She asks when the Slaughter and May report will be published. | She asks when the Slaughter and May report will be published. |
| Meddings says there is no date but they have started work. He says he hopes it’s several weeks, not longer than that. But not before the summer holidays. They haven’t given me a deadline date. | Meddings says there is no date but they have started work. He says he hopes it’s several weeks, not longer than that. But not before the summer holidays. They haven’t given me a deadline date. |
| Montes is asked if Sabadell should be paid by TSB for this failure? | Montes is asked if Sabadell should be paid by TSB for this failure? |
| He says, we are quite conscious about the damage to TSB customers. We know most of it came from bad functioning of the system after migration. We have committed resources to work to a solution. There have not been any kind of discussions about payments,. There won’t be until the solution is finished. | He says, we are quite conscious about the damage to TSB customers. We know most of it came from bad functioning of the system after migration. We have committed resources to work to a solution. There have not been any kind of discussions about payments,. There won’t be until the solution is finished. |
| Question: who was really in charge here during this process? | Question: who was really in charge here during this process? |
| Pester: The responsibility and decision was with the TSB board. | Pester: The responsibility and decision was with the TSB board. |
| Question: Was the timing, decision making, risk management controlled by TSB? | Question: Was the timing, decision making, risk management controlled by TSB? |
| Pester: Ultimately yes although we used a range of suppliers to opine whether we were in a position to migrate. | Pester: Ultimately yes although we used a range of suppliers to opine whether we were in a position to migrate. |
| Question: clerks here found a forum with customers complaining of receiving letters for other people. Why are you not prepared to make sure your customers are not being defrauded? | Question: clerks here found a forum with customers complaining of receiving letters for other people. Why are you not prepared to make sure your customers are not being defrauded? |
| Pester says he has acknowledged TSB has sent multiple letters in the same envelope. Again he apologises. | Pester says he has acknowledged TSB has sent multiple letters in the same envelope. Again he apologises. |
| Question: how many customers have left the bank? | Question: how many customers have left the bank? |
| Pester: 12,500 customers have switched away, but I do not know causes. | Pester: 12,500 customers have switched away, but I do not know causes. |
| Question: how many staff have you recruited? | Question: how many staff have you recruited? |
| Pester: 2,200 | Pester: 2,200 |
| Question: are you paying them full overtime? | Question: are you paying them full overtime? |
| Pester: yes, we are paying twice normal rate for overtime. | Pester: yes, we are paying twice normal rate for overtime. |
| Question: so why weren’t they adequately resourced in the first place? | Question: so why weren’t they adequately resourced in the first place? |
| Pester: we did increase resource before migration, but we didn’t expect this level of problems. We would never have done the migration if we had known we would have these issues. | Pester: we did increase resource before migration, but we didn’t expect this level of problems. We would never have done the migration if we had known we would have these issues. |
| Question: Payments to Sabadell for migration were delayed until completion. Why? | Question: Payments to Sabadell for migration were delayed until completion. Why? |
| Pester: To account for any cost overruns. | Pester: To account for any cost overruns. |
| Question: will the payments be made? | Question: will the payments be made? |
| Pester: it will depend on the report into what happened. | Pester: it will depend on the report into what happened. |
| On compensation, Pester says if people are not happy they can come back to us. | On compensation, Pester says if people are not happy they can come back to us. |
| He says it is easy to register a complaint. | He says it is easy to register a complaint. |
| But Pester is accused of not taking on board how serious some of these problems (eg the ruined wedding) are. | But Pester is accused of not taking on board how serious some of these problems (eg the ruined wedding) are. |
| Question: can you give a guarantee on a minimum amount? | Question: can you give a guarantee on a minimum amount? |
| Pester says he will write to the committee with the figures. | Pester says he will write to the committee with the figures. |
| Pester is asked about TSB’s profits which he says are around £200m. | Pester is asked about TSB’s profits which he says are around £200m. |
| He says money should not be an object for resources. | He says money should not be an object for resources. |
| Question: and should not be an object for compensation? | Question: and should not be an object for compensation? |
| Pester says of course not. | Pester says of course not. |
| Question: how much have you employed for resources and compensation? | Question: how much have you employed for resources and compensation? |
| Pester says we have no set amount. | Pester says we have no set amount. |
| Meddings says we will set an appropriate compensation framework. | Meddings says we will set an appropriate compensation framework. |
| To date bank has cancelled charges worth £29m. Have compensated people for fraud of £11.2m, and backlog means it is probably £20m year to date. | To date bank has cancelled charges worth £29m. Have compensated people for fraud of £11.2m, and backlog means it is probably £20m year to date. |
| Incremental resources, overtime and people, IBM etc, about another £20m. | Incremental resources, overtime and people, IBM etc, about another £20m. |
| Montes says the figures are consolidated into Sabadell accounts. | Montes says the figures are consolidated into Sabadell accounts. |
| Question. You have dealt with 24,094 complaints out of 95,063. This is not a significant number. Should you be adding more resources to address this problem? | Question. You have dealt with 24,094 complaints out of 95,063. This is not a significant number. Should you be adding more resources to address this problem? |
| Pester says we have added 466 extra complaints handlers, over the last week. | Pester says we have added 466 extra complaints handlers, over the last week. |
| We dealt with the 24,000 before this, our aspiration is to close this down as quickly as possible. Every complaint we attempt to deal with within eight weeks of receiving it. | We dealt with the 24,000 before this, our aspiration is to close this down as quickly as possible. Every complaint we attempt to deal with within eight weeks of receiving it. |
| Question: are you prepared to put in extra staff? | Question: are you prepared to put in extra staff? |
| Meddings says absolutely yes. We are adding resource as fast as it is possible to do. We have taken more people into branches and call centres, they have to be trained so we are bringing on resources and will continue to do so. | Meddings says absolutely yes. We are adding resource as fast as it is possible to do. We have taken more people into branches and call centres, they have to be trained so we are bringing on resources and will continue to do so. |
| Question: the compensation figures are extraordinarily small. Will anyone who is forced out get golden parachutes? | Question: the compensation figures are extraordinarily small. Will anyone who is forced out get golden parachutes? |
| Meddings says we will look at conclusions, take necessary action. It will depend on outcome and nature of the fault. | Meddings says we will look at conclusions, take necessary action. It will depend on outcome and nature of the fault. |
| If they are found to have been grossly negligent that will be taken into account in the terms of their departure. | If they are found to have been grossly negligent that will be taken into account in the terms of their departure. |
| Question about the letters written by TSB to direct debit companies when customers wanted to switch, saying customers had died. | Question about the letters written by TSB to direct debit companies when customers wanted to switch, saying customers had died. |
| Pester says there were 370 people affected and caused by an error in the software. | Pester says there were 370 people affected and caused by an error in the software. |
| Pester says they are speaking to the customers’ new banks to contact customers and offer them compensation. | Pester says they are speaking to the customers’ new banks to contact customers and offer them compensation. |
| Pester says they are correcting the error with the direct debit companies. | Pester says they are correcting the error with the direct debit companies. |
| Morgan says you talk about things being resolved but they may not be resolved to the satisfaction of the customers. | Morgan says you talk about things being resolved but they may not be resolved to the satisfaction of the customers. |
| Mann says you are in breach of data protection law, you are paying pitiful levels of compensation which I find deeply disturbing, you pay yourselves massive amounts of money. Can we be certain some heads are going to roll? | Mann says you are in breach of data protection law, you are paying pitiful levels of compensation which I find deeply disturbing, you pay yourselves massive amounts of money. Can we be certain some heads are going to roll? |
| Meddings says it would be wrong to prejudge. But depending on what investigation we will take action. | Meddings says it would be wrong to prejudge. But depending on what investigation we will take action. |
| Mann asks them - especially Pester - if they will fall on their swords before they are pushed. | Mann asks them - especially Pester - if they will fall on their swords before they are pushed. |
| Pester says his focus is on fixing this for customers, I am passionate about TSB, I don’t think anyone else will be as committed as me, when we get to end of this procedure we will see. | Pester says his focus is on fixing this for customers, I am passionate about TSB, I don’t think anyone else will be as committed as me, when we get to end of this procedure we will see. |
| Mann says where is the leadership? | Mann says where is the leadership? |
| Meddings says senior seats carry responsibility and we have chosen these seats. It’s important to establish what went wrong and where there is culpability we will act on it. | Meddings says senior seats carry responsibility and we have chosen these seats. It’s important to establish what went wrong and where there is culpability we will act on it. |
| Mann asks how many heads will roll? | Mann asks how many heads will roll? |
| Meddings says it is important not to prejudge. Slaughter and May are conducting an independent review, we will publish it and take action on the basis of its findings. | Meddings says it is important not to prejudge. Slaughter and May are conducting an independent review, we will publish it and take action on the basis of its findings. |
| If I am found to be culpable then the actions will attach to me. | If I am found to be culpable then the actions will attach to me. |
| John Mann asks how could one of his constituents receive someone else’s details. | John Mann asks how could one of his constituents receive someone else’s details. |
| Pester says he apologies. I don’t know how it happened, I don’t know the circumstances. It’s not something we do intentionally. | Pester says he apologies. I don’t know how it happened, I don’t know the circumstances. It’s not something we do intentionally. |
| Mann asks Meddings the same question. | Mann asks Meddings the same question. |
| Meddings says I can’t answer without knowing details. | Meddings says I can’t answer without knowing details. |
| Mann asks if this an ongong problem. | Mann asks if this an ongong problem. |
| Pester said he is not aware of it. | Pester said he is not aware of it. |
| Mann says his constituent wrote to TSB and heard nothing back. You’re saying you’re not aware and that’s astonishing. I’m struggling that you’re even aware of the problem. | Mann says his constituent wrote to TSB and heard nothing back. You’re saying you’re not aware and that’s astonishing. I’m struggling that you’re even aware of the problem. |
| Mann asks about a constituent whose wedding was ruined and how much she received. | Mann asks about a constituent whose wedding was ruined and how much she received. |
| Meddings says she has been compensated but can’t say how much. But it would compensate for distress. | Meddings says she has been compensated but can’t say how much. But it would compensate for distress. |
| Mann says it’s £100. | Mann says it’s £100. |
| [Silence] | [Silence] |
| Medding says he apologises. | Medding says he apologises. |
| Mann says its £1 per apology in this session. | Mann says its £1 per apology in this session. |
| Mann now asks why Sabadell chief operating officer Miguel Montes is still in his job. | Mann now asks why Sabadell chief operating officer Miguel Montes is still in his job. |
| Montes also apologies, and admits not all problems have been solved. | Montes also apologies, and admits not all problems have been solved. |
| Mann asks how embarrassed is he that his bank’s reputation has been sullied by people who don’t know how people received other people’s details. | Mann asks how embarrassed is he that his bank’s reputation has been sullied by people who don’t know how people received other people’s details. |
| Montes says, we are very embarrassed. | Montes says, we are very embarrassed. |
| Mann: How embarrassed are you about the level of compensation for someone who’s wedding has been ruined? | Mann: How embarrassed are you about the level of compensation for someone who’s wedding has been ruined? |
| Montes: I have no competence to answer this question. | Montes: I have no competence to answer this question. |
| Mann: Do you have confidence in working with people who don’t bother compensating someone when it’s raised in parliamentary committee. Is that good for your brand reputation. | Mann: Do you have confidence in working with people who don’t bother compensating someone when it’s raised in parliamentary committee. Is that good for your brand reputation. |
| Montes: our brand reputation has been damaged. We have worked night and day, we have progress but not enough. Paul and his team have been clear we will do whatever it takes to compensate customers. | Montes: our brand reputation has been damaged. We have worked night and day, we have progress but not enough. Paul and his team have been clear we will do whatever it takes to compensate customers. |
| Mann says Meddings reputation is on the line as well. How long will this take? | Mann says Meddings reputation is on the line as well. How long will this take? |
| Meddings says, we are working vigilantly. We are digging ourselves out of a hole. We have challenges with the call lines, and occasionally in the branches. | Meddings says, we are working vigilantly. We are digging ourselves out of a hole. We have challenges with the call lines, and occasionally in the branches. |
| Mann says the branches are bailing you out, and you have put the call centre staff in a difficult situation. | Mann says the branches are bailing you out, and you have put the call centre staff in a difficult situation. |
| Meddings thanks the bank’s staff for having to deal with the situation. | Meddings thanks the bank’s staff for having to deal with the situation. |