Barclays is expected to pay millions in compensation for recent IT outages which prevented customers from banking, a new letter to MPs has revealed.
The lender said it expects to pay between £5m and £7.5m in compensation to customers for “inconvenience or distress” caused by days of disruption earlier this year, according to the influential Treasury Committee of MPs.
The glitch began at the end of January and lasted several days. It coincided with payday for many and the deadline for self-assessment tax returns.
Money blog: Tourists banned from driving in Spanish town
This was caused by “severe degradation” in the performance of their mainframe computer, a large computer used by big organisations for bulk data processing.
It resulted in the failure of 56% of Barclays‘s online payments, the bank told the committee.
Up to £12.5m, however, could be paid when all outages over the last two years from January 2023 to February 2025 are factored in, the committee said.
It would be by far the biggest amount of compensation paid by a firm in the last two years. Bank of Ireland would be the second, having issued £350,000 in compensation.
The committee is investigating IT problems at all banks that prevent or limit customer access.
A recurring problem
The nine top banks and building societies written to by the Treasury Committee accumulated 803 hours of unplanned outages over the last two years, they said, equivalent to 33 days.
These hours were comprised of 158 individual IT failures.
As a result, the bank with the longest outages was NatWest with 194 hours of failures.
The second longest period of services being down was at HSBC which logged 176 hours of disruption.
Why does this keep happening?
As part of their inquiries, banks said common reasons for IT failures included problems with third-party suppliers, disruption caused by systems changes and internal software malfunctions.
The responses were received before last Friday’s online banking failures, which caused difficulties for millions on payday, but the committee said it would request data on the latest disruption.
Barclays’ recent payday failure is also not captured in the numbers.
The post Millions in compensation expected for customers impacted by Barclays outages | Money News appeared first on World Online.
