RBS boss blames software upgrade for account problems

Stephen Hester, RBS: "There was a software change that didn't go right"

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The boss of RBS has confirmed that a software change was responsible for the widespread computer problems affecting millions of customers' bank accounts.

"It shouldn't have happened and we are very sorry," Stephen Hester said.

The software upgrade failed last week, and although it was put right it caused the huge backlog of transactions that are still being sorted out.

He told the BBC the bank's systems were working normally but it would take a few days for the backlog to be cleared.

The failed software upgrade meant that hundreds of thousands of customers failed to have money transferred either into or out of their accounts.

Mr Hester said: "There was a software change which didn't go right and although that itself was put right quickly, there then was a big backlog of things that had to be reprocessed in sequence, which is why on Thursday and Friday customers experienced difficulty which we are well on the way to fixing."

He declined to speculate about how much the fiasco might cost the bank.

Those customers affected:

  • Should be returned, as quickly as possible, to the position they would have been in if the fault had not occurred
  • Can apply for emergency cash at their branch if the failure has created serious financial difficulties
  • Will see overdraft fees waived or refunded if levied because balances have not been updated
  • If they have a current account with an RBS, NatWest or Mint credit card, can also withdraw up to an additional £100 over their limit on their card
Branches stay open, longer

Earlier RBS, which owns NatWest and Ulster Bank, said it was extending opening hours for 1,200 main branches all week to help clear a backlog of work.

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This debacle at RBS is about as serious as it gets for any bank”

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Ulster Bank says its customers' problems may not be fixed until Friday.

And some customers are still telling the BBC that their banking problems are continuing.

Ken Taylor in Watford runs a payroll business and has 1,000 contractors still waiting to be paid.

"The reputational damage to my business will be immense," he said.

Dean Sneddon in Bolton says he cannot pay for goods or his staff.

"Our business has not only not received payments, but money that was in the account has disappeared," he said.

Martin Reynolds from Birmingham is a disabled user of Ulster Bank.

He says he has been unable to do the online food shopping he relies upon.

"I am disabled, and rely on shopping online. To date, Asda have had to cancel my essential food order twice," Mr Reynolds said.

'Charges waived'

One customer's story

"I have been left unable to buy food or fuel. I work for a very low wage and live hand-to-hand every week.

"I had my three young children staying this weekend and spent my last £15 cash on meals for them.

"I was utterly embarrassed when I was just 90p short at the till with a huge queue behind me. How fortunate that the shop owner was kind enough to understand and let me take all the shopping.

"This morning I am still unable to gain access to my account.

"NatWest staff have been brilliant and offered me £300, but I have no idea how much should be in my account and I cannot afford to repay any overdraft that may occur.

Mark Bowker, Manchester

From Tuesday to Friday, some 1,200 main NatWest and RBS town and city branches will extend opening hours to between 08:00BST and 18:00 BST to assist customers.

Susan Allen, director of customer services at RBS, said she was "cautiously optimistic that RBS and NatWest customer account balances will be largely back to normal from Monday".

The bank now faces reimbursing potentially millions of customers who have incurred extra costs because of the computer problem.

It stressed that no-one would be left out-of-pocket.

"We will automatically waive any overdraft fees or charges on current accounts," Susan Allen said.

"This will be processed over the next few days," she added.

How to complain

The bank says its own customers who have suffered financial losses should take their case to a local branch where managers will arrange to pay them back.

Claims are being judged case by case.

Customers' rights

Customer walks past Natwest
  • Anyone out of pocket owing to a technical or systems failure has certain rights
  • Banks should put customers back into the position they were in had the problem not occurred
  • That does not mean extra compensation is a right
  • Anyone affected should let the bank know about their situation as soon as possible
  • Customers should check to see if any payments due from an account have bounced
  • They should also keep a record of how the problem has affected them - just in case a formal complaint is required later

Source: Financial Ombudsman Service

Examples of the costs the bank is expecting to bear are customers' extra telephone calls and penalties for late payment of credit card bills.

Customers are advised to keep copies of any documentary evidence to back up their stories.

But a spokeswoman said "when we say no one will be out of pocket, we mean it."

RBS has also promised to ensure credit agencies do not put a black mark on customers' credit scores if, for instance, the bank failed to make a credit card payment on time.

The Payments Council, the banking body which includes representatives from all the major banks and building societies, has agreed to help non-RBS customers who have suffered knock-on effects.

It is understood that RBS has agreed to pick up the cost of restoring these customers to the position they would have been in had the computer failure not happened.

However there is no policy yet on whether or not anyone will be offered extra payments as compensation for inconvenience rather than quantifiable financial loss.

The bank has doubled the number of call centre staff to deal with problems and complaints and will reimburse customers for the cost of calling its 0845 helpline number.

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