Victims of a fraud epidemic at the crisis-hit bank TSB are being denied refunds, Money Mail can reveal.
We have been inundated with letters and emails from TSB customers who have lost their life savings to con artists in the wake of the bank’s IT meltdown last month.
They have been duped out of sums as large as £60,000, yet denied assistance from TSB’s overloaded fraud helpline and branches.
One mother has been left for almost a week without access to cash and says she is now struggling to feed her children; a disabled 64-year-old was told to beg his relatives for emergency cash; and a cancer patient had her £29,000 critical illness payout snatched.
We have been inundated with letters and emails from TSB customers who have lost their life savings to con artists in the wake of the bank’s IT meltdown last month
Distraught customers are being forced to wait up to five hours to speak to someone on the bank’s fraud hotline. When they finally get through, many are being cut off or informed that the team has gone home.
Others are being told they will have to wait for days — with no access to funds — to learn whether they will get a refund, as the bank is so overwhelmed with cases to investigate.
In the few instances where TSB is giving customers a clear answer, it has routinely refused to give payouts.
Instead, it has blamed fraud victims for handing information to the con artists who drained their accounts.
It was only when Money Mail intervened that the bank said it would refund customers.
The new scandal has led to calls for TSB chief executive Paul Pester — who earned £1.8 million last year — to resign.
While some customers have no idea how their accounts have been emptied, others admit they have received phone calls or texts that later transpired to be fraudulent.
Criminals appear to be preying on TSB customers’ fears that their accounts were compromised in the bank’s botched attempt to upgrade its computer system.
During the original IT debacle, as well as thousands of customers being locked out of their online accounts, some were able to see the details of other customers’ balances and payments when they logged on. That chaos led to TSB being dubbed the ‘Totally Shambolic Bank’.
Experts warned at the time that fraudsters would attempt to exploit the confusion.
Now, it has emerged that, over the past week or so, crooks have started phoning TSB customers pretending to be bank staff.
Some customers have received emails or text messages that appear to come from TSB’s fraud department. They often appear alongside genuine previous messages from the bank and ask the customer to call the number given urgently or update their security details online.
Typically, the fraudsters say there has been suspicious activity on the customer’s account and ask them whether a particular transaction is genuine.
When the victim denies making the payment — which has been fabricated as part of the con — the crook posing as a TSB worker warns the customer that they have been defrauded.
The customer then receives a text from TSB containing a six-digit code and the words: ‘Hello, TSB here. Use password/code xxxxxx. Didn’t request this? Please call us.’
Distraught customers are being forced to wait up to five hours to speak to someone on the bank’s fraud hotline
Victims are told this is part of the bank’s security checks and a vital stage of issuing a refund.
The fraudster then asks the customer to read this code out loud over the phone.
In fact, these codes are understood to enable the criminal to access the customer’s account. It is unclear exactly how the crooks are generating these codes. One theory is that they are using them to reset online passwords.
TSB’s website says to reset a password, you need to enter your internet banking user ID, first name, last name and date of birth.
Once they have persuaded the victim to read out the code over the phone, they use it to get into and empty their bank accounts.
TSB insists that there was no data breach during the weeks of chaos when its computer upgrade went wrong.
But victims say if this is the case, then they have no idea how the fraudsters have got hold of their phone numbers.
They also believe the criminals must have access to their online banking user names and security information, because they are not divulging these over the phone.
Last night, City watchdog the Financial Conduct Authority (FCA) said the bank must repay fraud victims.
Meanwhile, campaigners are calling for executives at the bank to take control or resign. John Mann, an MP on the powerful Treasury Select Committee, says: ‘TSB is in the midst of a chronic crisis. The Financial Conduct Authority needs to send someone into the bank to sort this out.
TSB chief executive Paul Pester is set for another grilling by MPs
‘If the directors of the bank cannot sort out these problems, they should resign immediately.’
Ross Anderson, a professor of security engineering at the University of Cambridge, says: ‘This is outrageous. TSB cannot blame customers for falling victim to a sophisticated scam when its systems are in disarray and it won’t answer the phone.’
Customers say it has been impossible to contact the bank to check whether the calls and texts are genuine, because call waiting times can be five hours.
Even when victims do finally get through to someone, they are left in limbo: typically, they are told that their money cannot be refunded until an investigation is completed and their account is then blocked.
Customers are often not given any idea by staff whether their cash will be repaid or when they can get back into their account.
In the worst cases seen by Money Mail, victims who have unwittingly read out the codes in text messages have been warned that they will not be refunded.
Banks do not have to refund fraud victims if it can be proved that the customer authorised a transaction. They can also deny payouts if they believe that the customer was negligent and failed to protect their card details, PIN or password. But experts say the
bank should refund victims regardless — given the unique circumstances.
Martyn James, of the consumer website Resolver, says: ‘TSB is responsible for this error; it should be responsible for refunding customers. What makes this scenario so unfair is that victims have no way of verifying anything, because the bank is too busy to answer the phone.
‘TSB should also be offering customers whose accounts are frozen an extended credit facility so they have access to money, rather than being left high and dry.’
A spokesman for the FCA says: ‘We are in continuous contact with TSB. No customer should lose out as a result of the problems at the firm and we expect TSB to quickly resolve any reports of fraud.’
Nicky Morgan, chair of the Treasury Select Committee, said that TSB chief executive Paul Pester would be grilled again by MPs following the latest crisis. TSB insists that it would never ask for security details in text messages or emails, nor ask customers to divulge their passwords over the phone.
The bank refused to say how many of its customers had been targeted by fraudsters or had lost money.
It added that it would be reviewing each situation on a ‘case-by-case’ basis and those who had been defrauded as a ‘direct result’ of the IT meltdown would not be ‘left out of pocket’.
The 64-year-old told to borrow from relatives and the doctor insultingly accused of helping the crooks – the harrowing stories of TSB victims
Fraudsters stole the entire £1,600 in Tracey Best’s TSB current account
The last time Tracey Best had any money to buy food or other essentials for her children was more than a week ago.
The mother-of-three, who fell victim to TSB fraudsters on Tuesday last week, fights back tears as she explains her predicament.
Since fraudsters stole the entire £1,600 in her TSB current account, she has been feeding her family from tins in her kitchen cupboards.
The 42-year-old, from Woodbridge, in Suffolk, says the food is rapidly running out.
‘TSB has let me down so much and I would like some compassion,’ says Tracey.
‘Criminals have taken the whole lot from my current account, so I have no access to money whatsoever. But TSB has been so cold and I just feel like a number to them.’
Tracey is among hundreds of TSB customers whose accounts have been drained by criminals in the wake of the bank’s IT meltdown last month.
Like her, many have been left without funds, but found it virtually impossible to contact the bank on its overwhelmed fraud helpline.
Some are now being told that the thousands of pounds snatched from their accounts will not be refunded.
The response from TSB — which has previously boasted about how it puts its customers first in everything it does — has deeply upset victims such as Tracey, whose children are aged nine, 13 and 16.
She has no other savings and yesterday had to accept a food parcel from a friend.
Every time she tried to contact the bank, she was left on hold for around two hours. On one of the few occasions she did finally get through to the fraud department, she was told its staff had gone home for the day.
Like many victims who have contacted Money Mail, Tracey’s fraud nightmare started with a call on her landline from a man who claimed to be from TSB and asked about a suspicious transaction on her account.
He told Tracey she had been defrauded and asked her to read out a code that was being sent to her mobile phone.
Tracey usually receives texts from TSB alerting her to announcements by the bank and says she was given no reason to suspect the message was fraudulent.
But the man was a con artist and the code allowed him to change her online banking password. Once in possession of this, he was able to raid her account.
After her struggle to report the fraud over the telephone, TSB blocked her account. Tracey says that she was told the bank could not say when it would be unblocked or if she would receive her money back — and asked her to be patient.
After Money Mail intervened, Tracey was repaid the money — although she still cannot access her account.
‘BORROW FROM YOUR FAMILY’
Keith Jones was told to rely on the goodwill of his loved ones after his TSB account was raided.
The 64-year-old from Brandon, County Durham, had his current account blocked by the bank after a crook stole £826 at the weekend.
He was left wondering whether the money would be refunded.
Keith’s nightmare unfolded on Sunday afternoon, when he received a call to his mobile from a man who claimed to be from TSB.
Keith Jones from Brandon, County Durham, had his current account blocked by the bank after a crook stole £826 at the weekend
He told Keith that he was calling to check whether a £500 transaction on his account was genuine. Keith said he had made no such payment.
The man then told Keith that he had been defrauded, but that TSB would refund the cash.
A six-digit authentication code was sent to his mobile phone in a text from TSB. The man demanded Keith read it back to him.
Keith believed this was necessary to help him get his money back, but, in fact, it was a code the criminal needed to change the password on his account.
He checked his balance shortly after the call and discovered £826 had been snatched.
When he tried to contact TSB, the phone rang for four-and-a-half hours before it was answered.
TSB blocked his account, but could not tell him when he would get the money back or when the block would be lifted. Keith, who is disabled, says the call handler suggested he should borrow money from friends and family to get by.
‘The woman in the call centre sounded thoroughly fed up,’ he says. ‘I can’t blame her, having to deal with this, but TSB really needs to get a handle on it all.’
£29,000 CANCER PAYOUT STOLEN
In another case, seen by the consumer website MoneySavingExpert, a cancer patient had her £29,000 critical illness payout snatched.
The woman in her 30s, who asked to remain anonymous, received the money following her diagnosis with throat cancer.
When Mr Jones, 64, tried to call TSB the phone rang for four-and-a-half hours before it was answered
She was hoping to use it as a deposit for her first home.
TSB has said that it will refund the woman.
COUPLE TOLD: NO £4,800 REFUND
Samantha and Adrian Phillips, from Bacton, in Suffolk, were told TSB would not pay back the £4,880 they lost in a text message scam.
Samantha, 48, received a message at the end of last month as TSB’s IT meltdown raged.
She says it appeared to come from a genuine TSB number and showed up next to other texts from the bank on her phone. Fraudsters are able to ‘spoof’ numbers in this way using computer software.
The message asked her to call the bank. Samantha rang the number and spoke to a woman called Nicky Giles, who explained there had been fraud on the account.
She told Samantha that she would send her a six-digit passcode via a text. Samantha read out the number to Nicky, as requested.
But she had no idea that this was actually a code to change the password on her current account.
Samantha, who works at a pre-school, later tried to ring TSB to check the call was genuine, but was unable to get through.
In the end, Adrian, an engineer, drove to a branch five miles away, where staff confirmed the fraud and blocked their account, which had already been drained by ‘Nicky’. Over the next few days, the couple rang the bank on numerous occasions to chase up a refund.
Last Monday — two weeks after they reported the fraud — the couple received a call from an adviser, telling them the bank was not going to cover the loss.
The Phillips say they have no idea how the criminals obtained the other details needed to access their bank account. This includes their user ID, first name, last name and date of birth.
Samantha says: ‘This was fraud. At no time did we authorise or were we aware of money being withdrawn from our account, or of anyone having the ability to do this.’ TSB has since said that it will refund the couple.
DOCTOR ACCUSED OF BEING IN ON IT
Fabienne Rughooputh, a junior doctor, was shocked when TSB blamed her for fraudsters draining more than £7,000 from her account.
She was kept on hold for almost two hours. When the bank rang her back days later, Fabienne, 29, says she was accused of being ‘involved’ in the scam and negligent with her details.
She had received a phone call from someone purporting to be from TSB while she was at work at a London surgery.
The bogus bank worker said he’d identified suspicious activity on her account. She told him that a £790 payment to Goldsmiths and a £298 payment to JD Sports in Glasgow were not made by her.
She was offered an appointment in a TSB branch the next day to go through her accounts. The caller knew she was from Suffolk but, as she was working in London, she asked to visit the Ealing branch.
The criminal told her that he would freeze her online banking immediately. She received a text message that contained a code and was asked to read this out. The text was a genuine TSB message.
He was then able to access her online banking account and steal her savings.
The ruse came to light the next morning when Fabienne turned up for her 11am appointment, but the bank branch wasn’t expecting her.
Two unauthorised payments of £3,900 and £3,500 had gone out.
Fabienne says that, unlike when she usually makes payments, she received no notification of the transactions.
The branch manager called the fraud team. Fabienne was kept on hold for almost two hours, before being told she was through to the wrong department.
Her accounts were eventually frozen and, the next Wednesday, TSB called to tell her it would not be paying back the money.
Fabienne says the bank told her that because she gave the fraudster the code, she was to blame.
‘I’ve never been treated so badly in my life,’ she says. ‘There’s clearly a major issue here and I’m not the only one who’s been affected.
‘You don’t suddenly get this kind of fraud surge if there hasn’t been a major problem.’
PENSIONERS LEFT £300 IN THE RED
Isabelle and Bill McDonald say they have been left in limbo, after fraudsters stole £3,900 and left their account £300 overdrawn.
Isabelle and Bill McDonald say they have been left in limbo, after fraudsters stole £3,900 and left their account £300 overdrawn
The couple, both in their 70s, received an email, seemingly from TSB’s online banking team, on May 14, which explained that the firm would be ‘implementing new authentication procedures’ to ‘safeguard’ their account.
The email included a link to a page that Isabelle said looked exactly like her online banking. She was asked to complete the ‘account verification process’, which would take only ‘a few minutes’.
She duly entered her bank ID number and other personal details. She was then asked for three characters of her password. An error message appeared and then she was asked for the remaining characters.
The next day, she checked her account and found that the money was gone. The McDonalds visited their local branch in Carluke, South Lanarkshire.
A staff member put them on the phone to the fraud team, but they were kept on the line for four hours. At this point, Bill, who has Parkinson’s, began to feel ill, so they left.
Isabelle, who has banked with TSB since she was 14, says she doesn’t know whether she’ll get her money back: ‘It’s dreadful. The employee we spoke to at the branch is now on holiday and we don’t know who else to call. Nobody seems to know what’s going on or what’s going to happen.
‘I’m worried about the bank account — it’s where all of our pensions go in.’
MUM’S MORTGAGE HOPES AT RISK
Julie Spencer received a text message on May 14 that appeared to come from TSB, asking her to contact the bank about a £2,499 payment to Apple. She didn’t respond.
Around 15 minutes later, she received a call from an 0345 number — the same as on the back of her bank card. She was asked about the suspicious payment, which she explained she hadn’t made.
As with other victims, the fake TSB employee seemed to know a lot about Julie. ‘She knew my name, address and recent transactions, such as my direct debits and when I last went to the supermarket,’ says Julie.
The fraudster said she’d put a block on Julie’s account. Julie then received a six-digit code, sent to her mobile, which she read out over the phone, as instructed.
The next day, Julie went into a TSB branch for an update — and discovered her savings were gone.
She managed to get through to the fraud team in an hour and said she was told she’d hear back in a week. She was advised to request an overdraft to tide her over while the bank investigated. But branch staff were unable to grant this loan, as her account had been blocked.
She tried again to get in touch with the fraud team the following day to remove the block. But, after being kept on hold from 9.30am to 1.30pm, the phone cut out.
Julie, who has two young daughters, has had to borrow £1,000 from her parents. She says this will soon run out.
She’s also concerned that she’ll be turned down for the new mortgage she is due to apply for in the coming weeks, as several direct debits payments have bounced while her account is empty.
‘I’m disgusted at the treatment I have received,’ she says.
‘I’ve been in the branch for three days running and was told that I can deposit money into my account to pay direct debits at my own risk. I don’t know whether my account is safe to use or not.’
Many of these victims have now been repaid following Money Mail’s intervention. The bank is reviewing other cases.
TSB says if customers have been a victim of fraud as a ‘direct result’ of its IT issues, they will be repaid.
A spokesman adds: ‘Protecting our customers’ money is our number one priority . . . we are on the lookout for suspicious activity and have a specialist team dedicated to investigating the issues reported.’