Will the Lloyds TSB switch really be "seamless"?

Maybe not.

For the 4.6 million Lloyds TSB customers being forcibly switched to the new TSB Bank as of 9 September, the move will be a "seamless transition." So says Antonio Horta-Osorio, chief executive of Lloyds Banking Group in an interview with the BBC. According to Horta-Osorio, the only change customers will notice will be a change of name. There is a bit more to it than that.

Ahead of the European Commission imposed carve up of Lloyds TSB, the group has a network of almost 2,000 branches. Before long, customers of the new TSB Bank will have a network of only 631 branches compared to the new Lloyds network of around 1,300 outlets. Customers of the new TSB Bank wanting to use a re-branded Lloyds branch will be treated as customers of a rival bank and pay service charges accordingly.

Lloyds customers using a newly re-branded TSB branch or vice-versa – TSB customers using a Lloyds-branded branch – will also find that their deposits will take longer to reach their accounts. Lloyds and TSB will, after all, be totally separate banks. In all of this, it is hard to regard the customer as being on a winner but the banks will be on a "nice little earner" in the future if you dare to use the wrong brand of branch.

The European Commission and the UK government will however pat themselves on the back and proclaim that an additional bank means more choice for the consumer so must be a good idea. Pure poppycock but the exercise has provided a windfall for IT contractors and branding consultants, among others. For Lloyds, the cost of this exercise has been massive: somewhere between £1.3bn and £1.5bn and counting.

As for being "seamless"? Well customers of TSB – in addition to having a branch network that has shrunk by two-thirds – will need to use new bank cards and negotiate around a new website. The website is down for much of this weekend by the by but in fairness to the bank, this has been flagged up well in advance. Then there is the management of Lloyds and the new TSB. In fairness to them, the project has been a massive undertaking and the TSB launch is going ahead next week on schedule.

For that, the management of Lloyds TSB deserves considerable credit. But by one measure – the inability to handle and assess customer complaints – Lloyds TSB is in a league of its own. The statistics released yesterday by The Financial Services Ombudsman were a shocker and shame Lloyds TSB.

It came as no surprise to read that a whopping 43 per cent of all PPI complaints in the first half of the year related to Lloyds and its various subsidiary brands. Lloyds has form as regards PPI – it was the most successful in selling – or mis-selling PPI – and has been getting more practice than most in handling PPI complaints. One might be forgiven for thinking that they would have got the hang of it by now. Not a bit of it. In February, it was fined £4.3m for dragging its heels in delaying PPI compensation to 140,000 customers.

Fast forward a few months and we learn that Lloyds complaints handling process is so dire that the Ombudsman found against Lloyds TSB in 90 per cent of PPI cases; as regards its Bank of Scotland business unit, the figure was not much better at 87 per cent. By contrast, the Ombudsman found against HSBC in less than one case in two (45 per cent) while Royal Bank of Scotland did even better with only 34 per cent of Ombudsman complaints relating to PPI mis-selling going against the bank.

For the record, the figure at Nationwide Building Society was a mere 7 per cent. Customers of the new TSB may be forgiven for hoping that certain aspects of Lloyds TSB’s customer service ethos remains with the new Lloyds.

Lloyds TSB. Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.