Bank of Ireland to waive penalty on customers who overdrew ATM accounts

 

BANK OF Ireland (BofI) has said it won’t penalise thousands of customers who overdrew their accounts during a major computer fault this week.

The bank said it would refund fees and allow an interest-free period for repayment of the overdrawn amount to customers who “inadvertently” withdrew more than was in their accounts.

“A small minority” of the bank’s 1.2 million customers took advantage of the malfunction of ATMs on Tuesday evening by overdrawing their accounts, it said.

The bank said its ATMs were working normally again yesterday after serious technical difficulties the previous day. However, problems were still being experienced with online banking, where only intermittent service was available.

Long queues formed at many of the bank’s machines on Tuesday evening as word spread that it was possible to overdraw accounts. Meanwhile, customers whose accounts were in funds experienced difficulties withdrawing all the cash they wanted.

The story continued to make news in worldwide media, with the New York Timeslikening the ATM payouts to “bank practices before the real estate crash” when 100 per cent mortgages were given to people on low incomes.

TCD law lecturer Eoin O’Dell said the bank’s route to reclaiming overpayments from customers might not be entirely straightforward. “In doing so, the bank, briefly Santa, will no doubt be cast as Scrooge.”

The bank has confirmed that its systems experienced “connectivity issues between some customer systems” due to a technical issue. This resulted in restrictions in Laser and ATM services and limited service on phone and online banking systems.

BofI sought to reassure customers that its core processing systems operated normally during the problems. It said the processing of direct debits, standing orders and international payments was not affected.

The bank added that most customers who used ATMs or bought items using Laser were accommodated. But it apologised to anyone who had a transaction declined or received less cash than they required. “We can confirm that a small minority of customers withdrew funds in excess of their available balance which has created an unauthorised overdraft position for them for which they are liable.”

A spokeswoman declined to say how many overdrew their account, or how long they would get to repay the money before having to pay interest. She said there was no significant deviation from the normal value and volume of traffic on ATMs on Tuesday.

The National Consumer Agency advised bank customers who had withdrawn money to check the terms and conditions of their account for information on interest and surcharges. If customers were not satisfied with their treatment, they could complain to the bank or, ultimately, the Financial Services Ombudsman.

Interest rates of 13.5 per cent apply to unauthorised overdrafts with BofI. The Consumers’ Association of Ireland said customers would have to repay any funds they had overdrawn but called on the bank not to impose fees and interest on these transactions.

The bank declined to put a figure on the cost of the computer error which led to the problems.