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[...] With customers locked out of their bank accounts, mortgage accounts vanishing, small businesses reporting that they could not pay their staff and reports of debit cards ceasing to work, the TSB[*] computer crisis has been one of the worst in recent memory. The bank, its chief executive, Paul Pester, admitted on Thursday, was “on its knees” and it faces a compensation bill likely to run to tens of millions of pounds.
[...] By March 2017, the nightmare for customers that was going to unfold a year later appeared inevitable. “It was unbelievable – hardly even a prototype or proof of concept, yet it was supposed to be fully tested and working by May before the integration work started,” the insider continued. “Senior staff were furious about the state it was in. Even logging in was problematic.”
[...] However, only hours after the switch was flicked, systems crumpled and up to 1.9m TSB customers who use internet and mobile banking were locked out. “I could have put money on the rollout being the disaster it has been, with evidence of major code changes on the hoof over last weekend and into this week,” the insider said.
[...] Customers reported receiving texts saying their cards had been used abroad, that they had discovered thousands of pounds in their accounts they did not have – or that mortgage accounts had vanished, multiplied or changed currency. One bemused account holder showed his TSB banking app recording a direct debit paid to Sky Digital 81 years from now. Some saw details of other people’s accounts and holidaymakers complained that they had been left unable to pay restaurant and hotel bills.
TSB, to customers’ fury, at first insisted the problems were only intermittent. At 3.40am on Wednesday 25 April, Pester tweeted that the system was “up and running”, only to be forced to apologise the next day and admit it was actually only running at 50% capacity.
[*] [Update added for our non-UK community. --martyb] TSB Bank was originally founded as "Trustee Savings Bank plc" on November 27, 1985:
TSB Bank plc is a retail and commercial bank in the United Kingdom, which is a subsidiary of the Sabadell Group. TSB Bank operates a nationwide network of 550 branches across England, Scotland and Wales. TSB launched in its present form on 9 September 2013, with more than 4.6 million customers and over £20 billion of loans and customer deposits, and is headquartered in Edinburgh.
(Score: 2) by VLM on Monday April 30 2018, @02:55PM (7 children)
I rode two banks into the ground during the first (or more to come) housing busts, one that got bought by a mortgage broker who went poof, and a year later the replacement which was heavily invested in Phoenix real estate loans finally accumulated enough foreclosed worthless properties to disappear, and in both cases the banks opened the literal next day as a subsidiary of a new larger bank with new rapacious service charges. Leading to my local credit union for the last decade which seems stable?
Anyway my point is there are bank fates worse than mere bankruptcy, such as total IT systems failure. Historically failure mean balance sheet implosion but it didn't impact customers immediately if at all, but post merger mania it seems the only failure mode left permissible by regulators is collapse of IT infrastructure where the customers get badly mauled.
(Score: 2) by kazzie on Monday April 30 2018, @04:04PM (6 children)
Is there an equivalent of the Financial Services Compensation Scheme [fscs.org.uk] (government indemnity for the first £85k of private individuals' savings if a bank collapses) where you live?
(Score: 2) by Runaway1956 on Monday April 30 2018, @04:20PM (5 children)
Yes, we have a rough equivalent, called the Federal Deposit Insurance Corporation. https://www.fdic.gov/ [fdic.gov] https://www.fdic.gov/deposit/ [fdic.gov]
The site is somewhat funky - as that second link loaded, I read that accounts up to $250,000 are insured, but that text isn't visible when the page finished loading. Maybe I allow scripts . . . . Found the text in the header, lol. Anyway, $250,000 is the current limit for insurance. I seem to recall when it was only $50,000, but wont' swear to that. For most of my adult life it has been $100,000. Anyone interested in when the limits increased can try to find it for themselves.
(Score: 1, Insightful) by Anonymous Coward on Monday April 30 2018, @04:38PM (2 children)
yeah, and they don't have the money to cover shit either. so whatever.
(Score: 2) by Runaway1956 on Monday April 30 2018, @05:02PM
Ooohhhhh-kay. But, it's fiat money anyway, right? The money has no real value, no intrinsic value. It's ONLY value, is as a measurement of the people's faith in the government.
In the thread on the Kennedy assassination, we briefly touched on the possibility that Kennedy was killed because he was going to expose the Federal Reserve for the scam that it is. Today, pretty much all the people in the world are subject to the whims of a central bank.
(Score: 2) by VLM on Tuesday May 01 2018, @02:40PM
If enough banks failed to make FDIC implode, there wouldn't be enough economy or civilization remaining presumably as the cause, such that your guaranteed deposits would be worth anything.
Sorta like it makes sense in a city sprawling enough to survive a 10 kiloton nuke (which wouldn't be very hard, depending how you define "survive") to install a 10 kiloton-proof vault for the safe deposit boxes, but you're just wasting valuable engineering effort making a 10 MT-proof vault if the entire metro area wouldn't survive a 10 MT nuke.
Also there's colloquial "the bank failed and went poof heeellllloooo FDIC" vs weirder paperwork and legal details, in my specific example FDIC claims were never made, because the banking regulators performed a shotgun wedding over the weekend and magically my tiny about to implode bank because a microscopic division of super big mega national too big to fail bank you've probably heard of. In my entire corporate life I've never seen mergers quite like banks during the 2007 crisis, even the most boring small business mergers take more than a weekend. FDIC only applies to claims against dead banks and mine technically never died, although it woudn't have made it alive to Monday if it weren't for the weekend shotgun wedding. My understanding is during the 2007 crisis this is pretty much how the government rolled, it was unusual to do the whole FDIC thing, but fairly typical to wake up one Monday to discover your bank is now a tiny branch of too-big-to-fail megabank.
I suspect much like the DoD has interesting contingency plans locked up in safes to prep for weird situations, the FDIC and friends, as seen in the 2007 crisis, have ways to keep things mostly working even if it involves dusty contingency plans stored in safes to perform mergers that usually take a year or so of legal effort under normal conditions, in a couple hours on a Saturday morning, when its really necessary. Kinda makes you wonder how much of the BS thats done out there is really necessary. Probably not much of it.
(Score: 3, Informative) by takyon on Monday April 30 2018, @04:43PM
It was temporarily raised from $100,000 straight to $250,000 [fdic.gov] by Congress and George W. Bush during the financial crisis, extended through 2013 in 2009 [fdic.gov], and then made permanent in 2010 [boston.com]:
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by All Your Lawn Are Belong To Us on Monday April 30 2018, @08:21PM
It started at $2,500. [wikipedia.org] I would have sworn to remembering when it was $10,000, and in fact typed that up before looking it up. But I'm significantly younger than that, but I'm older than the $40,000 minimum.
This sig for rent.