In a move it describes as a “UK banking first”, TSB will refund customers for any loss suffered from their account as a result of third-party fraud.
This compares with the current industry standard where customers are only refunded under limited circumstances, the subsidiary of Spain’s Banco Sabadell stated.
“The vast majority of fraud claims across UK banking are from innocent victims of fraud, who have been targeted by criminals and organised gangs,” said Richard Meddings, executive chairman of TSB.
“However, all too often these customers must fight to be refunded and are not treated as victims of crime.”
He added: “If a TSB customer innocently suffers a fraud loss on their account after being targeted by a criminal, we’ll cover it.”
The move by the bank follows a number of difficulties that have hit the bank’s reputation.
An IT disaster in 2018 saw millions of customers locked out of their accounts, many for more than a week.
It was triggered by the transfer of over a billion customer records to Sabadell from the bank’s previous owner, Lloyds.
TSB chief executive Paul Pester said the bank would waive millions in overdraft fees and charges.
In an interview with BBC Radio 5 Live at the time, he admitted: “We are on our knees.”
It incentivised customers to stay with the bank by promising to increase the AER (annual equivalent rate) on its classic plus account to 5% from 3%.
But, despite pledging not to reduce the rate after a year, it was revealed by UK newspaper The Times on 14 April 2019 that TSB has done just that.