The bank acknowledged its technology migration failure created an opportunity for criminals to exploit its customers.

“We saw a very aggressive targeting within one week of the problems,” TSB chief executive, Paul Pester, told the Treasury Select Committee.

“The fraud attack was 70 times the level we were expecting,” he said.

TSB chairman, Richard Meddings, added: “The bank is working to compensate any customers who have been defrauded as a result of this.

“No customers will be left out of pocket. We are compensating in full without any desire or attempt to attribute liability.”

Thousands of complaints

Yesterday the Financial Conduct Authority (FCA) revealed it was conducting an investigation into the bank’s failings alongside the Prudential Regulation Authority (PRA).

Overall the bank received 93,700 complaints from customers since the incident began and admitted it had lost between 400 and 500 customers per day.

However, Pester said the volumes of switching were not materially different to those before the incident.

“There have been 12,500 switches out since 2 May,” he said.

“It depends mostly on whether competitors are running campaigns to persuade customers to switch, in that case we see more customer switching.

“But there’s no dramatic change in the rate of switching,” he added.

Accept culpability

As part of the grilling by MPs, Miguel Montes, chief operating officer at parent company Sabadell Group,apologised for the impact on customers.

“We are truly sorry for the damage that we have inflicted on customers,” he said.

The bank has promised to undertake an independent review into what prompted the IT migration failure and how it has been handled.

Meddings acknowledged: “It’s really important to find out what went wrong here, we will disclose it and we will act on it and where there is culpability we will act on it.

He added: “If I am found to be culpable then the actions will be attached to me.”