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FCA launches investigation into TSB meltdown

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The Financial Conduct Authority (FCA) has launched an investigation into TSB following its IT meltdown last month that left customers unable to access their accounts for up to two weeks.

In a letter to the Commons Treasury Committee, Andrew Bailey, the chief executive of the regulator, confirmed that a formal investigation is being conducted alongside the Prudential Regulation Authority (PRA).

Bailey noted that this information is not normally made public but “given the level of public interest, I want to be clear that we will be conducting this work”.

In the letter, Bailey delivered a number of criticisms of Paul Pester, the TSB chief executive, pointing out that the regulator has been “dissatisfied with TSB’s communications” with concerns that the bank “was not being open and transparent about the issues experienced”.

Bailey added: “The current communications were perceived as poor, and could reduce trust in TSB and in the banking sector as a whole.”

Nicky Morgan MP, chair of the Treasury Committee, noted that the FCA does not make such stinging criticisms lightly.

She continued: “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.”

Pester and other TSB board members, as well as the FCA, are due to appear before the committee today.

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