TSB Staff Fired Over Compensation Claims For IT Meltdown

TSB has reportedly fired as many as five of its staff, over claims they took advantage of the compensation system setup after its IT fiasco in 2018.

TSB was engulfed in an IT meltdown in April 2018 when it moved its five million customers and their 1.3 billion records from a banking platform it was renting from former owner (Lloyds Banking Group) to its new ‘state-of-the-art’ platform developed by its Spanish-owner Banco de Sabadell.

TSB inadvertently locked up to 1.9 million customers out of their accounts, but this also impacted many of the 8,500 TSB staff whose own bank accounts were included in the outage. Banks often tend to encourage staff to set up bank accounts with their employeer.

Staff fired

TSB set up a compensation scheme for affected customers, and according to the Guardian newspaper, the compensation claims lodged by a number of TSB workers were re-assessed this year by the bank for signs that they may have used inside information to get the largest possible payout.

The Guardian reported that about 40-50 workers were initially identified by the bank over their claims earlier this year, according to sources with knowledge of the matter.

But further investigations led to formal internal proceedings against about eight staff during the summer, five of whom were eventually sacked.

Others reportedly resigned before a formal decision could be made.

“We responded to all migration customer complaints from staff members,” a TSB spokesperson was quoted as saying. “A very small number of complaints were found to be dishonest and appropriate action was taken.”

It seems that no criminal proceedings were launched as a result of the alleged wrongdoing.

The Guardian saw letters sent during the formal investigation of the eight employees, which accused them of having “failed to act with integrity” by logging false or exaggerated claims. It claimed the employees in question ended up securing compensation money that was intended for customers who were “genuinely impacted by migration issues”.

But the story doesn’t end there.

The Guardian was reportedly told that some staff were discouraged by managers from lodging complaints to overwhelmed call centres, though this was not an official policy from the bank and many employees went on to file individual claims.

Union criticism

Indeed, it is reported that the bank was forced to hire 600 extra staff to handle a total of 184,000 complaints, and drew up a framework to determine the amount of compensation it would pay for distress and inconvenience.

The bank’s compensation framework allowed TSB to determine whether claimants experienced “minor” to “significant” inconvenience, resulting in compensation from as little as £100 – £50 each for distress and additional expenses – or as much as £500 plus additional expenses.

The Guardian reported that TSB ended up spending around £130m on compensation claims.

The bank alleged that some staff were unfairly using this compensation framework to try to obtain the largest possible payout.

The Affinity trade union, which represents TSB employees, said the original review of employee compensation claims were a “witch hunt” against staff who had the right to complain. “Let’s be clear, TSB staff who are also customers of the bank have the same rights as other customers and their complaints should be treated in exactly the same way,” the union said.

Meanwhile the Unite union said none of its members was disciplined as a result of the sanctions. However, it also raised concerns about the way staff were being disciplined for actions they took as customers of the bank.

IT fiasco

Last month a long- awaited report concluded that a lack of testing at one of TSB’s data centres by Sabis, the IT services arm of Sabadell, coupled with poor judgement of Carlos Abarca, the bank’s chief information officer at the time, were to blame for the IT failure.

The IT fiasco resulted in TSB’s chief executive Paul Pester stepping down in September 2018, despite his repeated apologies to customers.

Pester had been in charge of TSB for seven years, and his resignation pleased some MPs on the Treasury select committee.

But others felt that Pester took the blame for Sabadell, and its chaotic data migration process, which cost TSB more than £400m.

IBM eventually had to be hired to help deal with the mess.

It should be noted that this is not the first time that the finger of blame has been pointed at Sabadell. Insiders have previously hinted that the blame should be laid at the door of the Spanish bank.

An insider previously told the Guardian newspaper that Sabadell had a disturbing lack of appreciation of the complexity of the migration.

Indeed Sabadell was reportedly warned as far back as 2015 that its ambitious plan was high risk, but Sabadell pressed ahead anyway.

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Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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