TSB IT Meltdown Locks 1.9 Million Customers Out of Accounts, Fined £48.65 Million

In April 2018, TSB attempted to migrate 1.3 billion customer records from Lloyds Banking Group's IT platform to a new system built by its parent company, Spanish bank Sabadell. The migration went catastrophically wrong.

Up to 1.9 million customers were locked out of their accounts for weeks. Some customers reported logging in and seeing other people's account details and balances — a serious data protection breach. The bank's mobile app and online banking were effectively non-functional for an extended period.

Fraudsters quickly exploited the chaos. With TSB's systems in disarray and its fraud detection capabilities compromised, criminals targeted TSB customers with phishing attacks and unauthorized transactions. The bank's ability to detect and prevent fraud was severely degraded.

Customers who relied on online and mobile banking to manage their finances, pay bills, and receive wages were left unable to access their money. Some missed mortgage payments, were unable to pay for essentials, and suffered significant financial distress.

TSB's customer service was overwhelmed. Branch staff had limited visibility into accounts. Phone lines were jammed. The situation persisted for months, with some customers reporting ongoing problems well into the summer.

The independent review led by law firm Slaughter and May found that TSB had not adequately tested the new system and had failed to have proper contingency plans in place.