B2B Payments

TSB Investigates Concerns Fraudsters Are Taking Advantage Of IT Mishaps

TSB, the U.K. bank that continues to face an ongoing scandal after an IT project went awry and blocked customers from their accounts, is now facing even more criticism as customers report funds stolen from their accounts.

Reports in the BBC said TSB’s fraud alert system isn’t working for some online banking customers. One customer told BBC Radio 4’s “You and Yours” that TSB said it was unable to warn her about fraudulent activity because fraudsters changed the customer’s contact details. The FI also acknowledged that it failed to identify some fraudulent withdrawals from her account.

“We have in place sophisticated systems which are designed to spot fraudulent activity; however, these transactions were not flagged by the system,” TSB wrote the customer. “We are unable to explain why, but please be assured that we continually update and improve our systems to improve their detection rates.”

The bank refunded the customer the full amount with additional funds, but the customer said those refunds were also reportedly stolen.

It’s unclear whether any small business customers have been affected by fraud since the IT meltdown.

Separate reports in Money Saving Expert said that TSB is investigating the possibility that fraudsters could be taking advantage of IT problems at the bank, which were the start of the FI’s problems. Earlier this month small business and consumer customers were locked out of TSB accounts when it encountered problems migrating IT systems from its former owner, Lloyds, to proprietary systems.

In April the bank said it had hired IBM to address the technological issues that had persisted for weeks.

Earlier this month, the U.K.’s Financial Conduct Authority faced criticism from small business owners complaining about mistreatment by big banks. Entrepreneurs told the Parliamentary Treasury Committee that the watchdog was unable to help them when they raised concerns about mistreatment from banks.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.