Belfast Telegraph

Saturday 19 April 2014

Watchdog savages Ulster Bank over handling of IT meltdown

Consumer Council chief executive Antoinette McKeown said that customers experienced a 'piecemeal reaction' to Ulster Bank problems

Ulster Bank demonstrated fundamental failures throughout an IT disaster last summer and did not adequately compensate customers for the chaos it caused, a watchdog has claimed.

In a new report, the Consumer Council has accused the financial powerhouse of having no appropriate contingency plan, ineffective communication and inadequate leadership after a software upgrade on June 19 led to a technical meltdown.

It has also said the bank was “haphazard and inconsistent” in its response to the crisis and that it gave consumers “misleading” information.

Almost half-a-million people in Northern Ireland were unable to use their bank accounts to full effect during the debacle which lasted until July 16. It meant customers were not able to check their balances, see if their direct debits had been paid, and, in some cases, they couldn’t access cash.

Consumer Council chief executive Antoinette McKeown said that customers experienced a “piecemeal reaction” to problems by Ulster Bank, resulting in fear and frustration.

“Consumers realise that even with the best systems and planning in place that things still can go wrong,” she said.

“However, if the worst happens, consumers expect companies to act promptly, manage expectations, demonstrate control and provide solutions and leadership.

“The Consumer Council has concluded that Ulster Bank failed consumers in a number of ways: they had no appropriate contingency plan; communication with consumers was not clear or consistent; there were a lack of spokespeople in the media and inadequate leadership.

“Ulster Bank still has questions to answer regarding what actually caused the systems failure in the first place, whether a similar crisis could happen again, and if they have the capacity to resolve the issue quickly and effectively.”

The critical report, entitled Payment Pending, was published yesterday.

“What started as a technical failure quickly escalated into a payments crisis and a communications disaster,” it said.

The report — which puts forward 10 recommendations — said that missing and changing deadlines for the resolution of issues undermined confidence in the bank.

According to the Consumer Council, one of the most significant failures was not providing details at an early stage of how they intended to put things right.

It was especially damning of the £20 offered by Ulster Bank by way of redress, which it said |didn’t go far enough.

“Despite asking Ulster Bank to explain how the £20 payment amount had been calculated, the Consumer Council has not received clarification as to how this figure was arrived at,” it said.

“It was noted that another bank in Northern Ireland was offering customers £100 to open an account and, in contrast, the redress scheme offered left many customers feeling Ulster Bank did not value their custom.”

Story so far

The Consumer Council has asked the Financial Services Authority and the Payments Council to oversee the development of a plan which gives assurances that a payments crisis can never happen again. It also said that Ulster Bank must now rebuild confidence and trust in the brand and honour its commitment to ensure that no one is “left out of pocket” as a result of the recent crisis. Crucially, Ulster Bank must provide resources and support to consumers who are continuing to struggle financially as a result of the crisis.