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TSB waives overdraft fees and interest charges in wake of IT chaos

Paloma Kubiak
Written By:
Paloma Kubiak

The bank has announced that all overdraft fees and interest charges for retail and small business customers will be waived for April as part of it’s pledge to ‘put things right’.

Last weekend TSB moved five million of its customers and 1.3 billion customer records to a new banking platform. But in the following days customers were locked out of accounts, and some reported having access to other users’ details.

Now days into the IT meltdown affecting internet and app banking, TSB has drafted in IBM to help identify and fix the issues.

CEO Paul Pester earlier this week promised that “no customer would be left out of pocket” and now, as well as waiving overdraft fees and interest charges, TSB will also increase the interest rate on its Classic Plus Account from 3% to 5% from 2 May “indefinitely”. This includes both existing customers and for new customers switching to the TSB Classic Plus account.

Further, for any customer who has faced interest or charges from other providers or lenders as a result of the issues, TSB said it is asking customers to contact it to explain their circumstances so it can work with them on a case-by-case basis to make sure it “puts things right”.

When asked whether non Classic Plus Account holders would see an increase in interest rates, TSB confirmed they wouldn’t.

Bumpy landing

Pester said: “As we moved over to our new banking platform last weekend, the landing was an incredibly bumpy one for our customers, and for that I am truly sorry. This is not the level of service that we pride ourselves on providing – nor is it what our customers have come to expect from TSB.

“Our teams continue to work around the clock to fix the problems that some of our customers are having in accessing their TSB accounts. I want to reassure our customers that the engine room of the bank is working as it should. This means that for the vast majority of our five million customers, everything is running smoothly.

“The challenge we are facing at the moment is that while we know it’s working, one of the main ways that our customers see everything is working – through our internet banking and mobile app – isn’t functioning as well as it should be, and I can appreciate how frustrating this must be for our customers.”

“Of course, customers can rest assured that no one will be left out of pocket as a result of these problems.  To begin to put things right, we will be waiving all overdraft fees and interest charges for all of our retail and small business customers for April.

Financial results overshadowed

TSB also reported its Q1 2018 results today. Profit before tax fell 39.3% to £19.3m in the first three months of the year compared to the same period last year, which TSB largely blamed on temporary movements in hedging arrangements.

The lender said it advanced £1.2bn of new mortgage loans in the first quarter of 2018, building on the £7bn gross lending advanced in 2017.

It added that on average, around 750 customers each day opened a new bank account during the period and customer deposits grew £30.6bn, up £0.9bn year-on-year from £29.7bn.