Barclays and Lloyds Banking Group – which also owns Halifax and Bank of Scotland – both suffered system issues, with customers unable to receive money going into their account, while direct debits were still processed.
It led to customers going overdrawn, and the statements of their accounts not reflecting the true figure.
The outage lasted for three days for Barclays’ customers over the weekend of 31 January, the final day self-employed workers had to pay their tax bills for 2023/24. It was also the first payday of the year for many workers.
Further, some customers had delays on property purchases as they could not send funds to their solicitors. Customers of Lloyds, Halifax and Bank of Scotland had similar outage issues beginning on Sunday 2 February, which continued into Monday.
Both businesses apologised and Barclays promised to put customers back into the financial position they were in before the problems began.
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12 questions to answer
Following those issues, MPs wrote an open letter to Barclays and asked 12 questions for the firm to answer by Wednesday 26 February.
The committee asked them to respond “given the importance of payment systems to the UK economy, and the potential for considerable consumer detriment from such failures”.
MPs asked why the shutdown occurred and what the bank did to prevent it from happening again. The Treasury Committee also requested an overview of how the bank’s board responded to the outage.
Other questions included how Barclays intended to stop the failure from occurring again, how many customers were affected and what the total amount of compensation paid to customers was.
The letter also inquired what the bank was doing to “mitigate the risk” of fraudulent transactions and how the bank was helping customers who may have suffered fraud during the outage period.
Other banks as well as Barclays to receive a letter were NatWest, Santander, Nationwide, HSBC, Lloyds Banking Group, Danske, Allied Irish Bank and Bank of Ireland.
Those lenders were given the same deadline to respond to the four questions that asked about the historical failures over the last two years and the reasons (if any) for why the systems failed.
‘Real problem for constituents’
Meg Hillier, chair of the Treasury Select Committee, said: “When a bank’s IT system goes down, it can be a real problem for our constituents who were relying on accessing certain services so they can buy food or pay bills.
“For it to happen at a major bank such as Barclays at such a crucial time of year is either bad luck or bad planning. Either way, it’s important to learn what has happened and what will be done about it.”
Hillier added: “The rapidly declining number of high street bank branches makes the impact of IT outages even more painful; that’s why I’ve decided to write to some of our biggest banks and building societies.”
