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TSB first bank to offer full refunds for all victims of fraud

TSB first bank to offer full refunds for all victims of phishing fraud

Following last year’s IT meltdown, wherein thousands of TSB customers fell victim to fraud, the bank has made an announcement. In future, they will refund any TSB customer who loses money to third-party fraud.

Last year TSB found thousands of its customers were financially hit when the migration from its former parent company’s IT systems to one run by its new Spanish owner Sabadell underwent a massive technical failure.

The week-long outage and subsequent technical problems cost the bank £330 million. This included £125.2 million in customer compensation and a further £49.1 million in fraud and operational losses.

The chaos and confusion led to an increase in scams as criminals sought to exploit the situation by sending phishing emails, calls and texts in an attempt to gain customers’ bank details.

At the time, TSB promised to reimburse all customers who had fallen victim to the scams. Now this latest announcement, known as the Fraud Refund Guarantee, puts that original announcement onto a permanent, ongoing promise. It is the first time a UK bank has offered such blanket compensation.

A voluntary code of conduct for banks comes into force at the end of May and will guarantee refunds for ‘innocent’ victims, although TSB’s new guarantee is likely to go further than this.

In another significant move, TSB has announced it will be bringing control of its technology and banking platform in-house as it makes plans to move away from Sabadell’s IT partner Sabis. This, they said, includes setting up direct contractual relationships with third-party technology suppliers.

Meanwhile, the bank sent a message to all customers announcing it was slashing interest rates that had been increased in an effort to stop customers leaving the bank in the aftermath of the scandal. As of 2 July, the five percent equivalent rate of the TSB Classic Plus account will fall to three percent.

TSB said that one in four Brits had been affected by online fraud last year and that £1.2 billion was stolen through bank fraud.

TG Bamford author photo

By:

A veteran freelance journalist writing extensively on internet news and cybersecurity.
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