Lobby group calls for compensation for firms hit by TSB’s IT troubles

The Financial Conduct Authority (FCA) has confirmed it is investigating TSB's IT migration as the Fe

The Financial Conduct Authority (FCA) has confirmed it is investigating TSB's IT migration as the Federation of Small Businesses calls for firms affected by the crisis to be compensated. Picture: Gareth Fuller/PA Wire - Credit: PA

A business lobbying group has called for compensation to be issued to small businesses who lost out in TSB's IT meltdown as the city watchdog confirmed its investigation into the incident.

The Federation of Small Businesses (FSB) said firms had been unable to pay 'panicked staff' and were left waiting for payments to process following the troubled transition to a new IT system.

Thousands of TSB's business and personal banking customers have faced weeks of disruption since the incident in April.

FSB national chairman Mike Cherry said it was 'vital' that small business owners affected by the incident were compensated.

He said: 'The banking and card payment glitches that we've seen in recent weeks are a reminder of the importance of in-person financial support and free access to cash. Many business owners have been kept on-hold to busy phone contact centres, unable to get the help they need.'

He added that the reported access to TSB accounts by external parties had left businesses vulnerable to phising texts and emails.

The Financial Conduct Authority (FCA) announced on Wednesday that it is investigating the bank jointly with the Prudential Regulation Authority.

Most Read

FCA chief executive Andrew Bailey outlined the joint probe in a letter to treasury committee chairman Nicky Morgan, who has warned she is 'deeply concerned' about how problems at TSB were communicated.

Mr Bailey said that 'level of public interest' had justified publicising the investigation, which would normally be kept under wraps.

Mrs Morgan released correspondence with the FCA in which Mr Bailey said TSB chief executive Paul Pester's evidence to the committee in May was 'an optimistic view' and 'greater caution would have made sense'.

Mr Bailey said Dr Pester could have shared 'more detail with the committee', including the initial views of a team of experts from IBM who were drafted in to help solve the crisis.

Up to 1.9 million people using TSB's digital and mobile banking found themselves locked out of their bank accounts following the migration of data on customers from former owner Lloyds' IT system to a new one managed by current owner Sabadell.

Has your business been affected by the TSB crisis? Email bethany.whymark@archant.co.uk