TSB staff whose own bank accounts were affected by an IT meltdown have been sacked for allegedly gaming the compensation system set up to help customers affected by the debacle.
The Guardian understands that compensation claims lodged by a number of TSB workers after the IT collapse in April 2018 were re-assessed this year by TSB for signs that they may have used inside information to get the largest possible payout.
About 40-50 workers were initially identified by the bank over their claims earlier this year, according to sources with knowledge of the matter. Further investigation led to formal internal proceedings against about eight staff during the summer, five of whom were eventually sacked. Others resigned before a formal decision could be made.
TSB inadvertently locked up to 1.9 million customers out of their accounts during the IT fiasco, which occurred when it tried to migrate customers from TSB’s former owner, Lloyds Banking Group, on to a new system.
A TSB spokesperson said: “We responded to all migration customer complaints from staff members. A very small number of complaints were found to be dishonest and appropriate action was taken.”
No criminal proceedings were launched as a result of the alleged wrongdoing.
Letters sent during the formal investigation of the eight employees 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”.
TSB has been working hard to restore its reputation and avoid any further missteps after the botched migration of customer accounts. The IT chaos led to the eventual ousting of chief executive Paul Pester.
Most lenders encourage staff to hold bank accounts with their employer, meaning that many of TSB’s near-8,500 staff at the time may have been affected. The Guardian has been 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.
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 rubric considered at least 10 categories that helped to measure the type of disruption the customer faced, including how long the customer was chasing the bank about the issue, whether their credit scores were affected and whether they had become victims of fraud as a result.
Based on those answers, TSB would decide 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. TSB ended up spending around £130m on compensation claims.
It is possible that some staff were simply aware of the kind of information required to lodge a claim as efficiently as possible. However, the bank claimed that some staff were unfairly using this rubric to try to obtain the largest possible payout.
The main text of one of the letters, seen by the Guardian, said: “It is alleged that you used the knowledge you had as a TSB partner of the TSB complaints remediation process to log a false/exaggerated complaint knowing you would receive a remediation payment.
“It is alleged that you mislead [sic] TSB into believing that you had suffered actual loss, distress and/or inconvenience in order to be awarded redress payment.”
The letter said the accused staff failed to provide evidence backing their claims and accused employees of breaching TSB’s code of conduct.
One trade union that represents TSB employees, Affinity, flagged the original review of employee compensation claims in a member newsletter in May, calling it 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.
Unite, another union representing TSB employees, 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.
Dominic Hook, Unite national officer, said: “I think it’s better to view the customer relationship as completely separate from the employer relationship, unless dealing with clear instances of fraudulent activity.”
Last month, an independent report commissioned by the bank accused TSB’s board of directors of lacking “common sense” before the 2018 IT meltdown. The investigation, carried out by law firm Slaughter and May, found the bank failed to ask its contractor key questions before the launch, and then shifted customers to the new IT platform before it had been fully tested.
TSB chairman Richard Meddings apologised for the disruption but said he did not agree with all of the report’s findings. He said technical issues were at the heart of the failure.
