Compensation to cost Ulster Bank ‘tens of millions’

Customers at Ulster Bank have received at least a €25 compensation payment as a result of the bank’s technical failure.

The four-week glitch left nearly 500,000 customers without access to their accounts, forcing them to go to branches where the bank distributed emergency funds.

Customers were stranded in financial limbo, unable to check balances, pay bills, or even receive wages.

Jim Browne, CEO of Ulster Bank, said the €25 payment adequately compensated customers for the inconvenience caused.

“We came up with this figure because we believe the amount recognises the inconvenience that the customers endured,” he said.

Ulster Bank’s parent company RBS had set aside €35m to cover the cost of compensation but, following the announcement of the measures, the cost from the chaotic computer systems failure is now expected to cost millions of euro more.

Mr Browne said: “We set aside a provision of €35m in the second-quarter financial results. These measures will end up costing us tens of millions on top of that.”

The measures announced include:

* A €25 payment to all personal account holders who had to make use of branch banking facilities;

* The waiving of certain fees, charges, and surcharge interest for three months;

* A promise to reimburse customers for any out-of- pocket expenses plus an additional 20% payment capped at €120;

* A one-off payment equal to an additional rate for three months of 0.06% gross, on the average daily balance of savings accounts between Sept 1 and Nov 30.

Affected customers and business owners have been urged to bring documentation to the bank as proof of financial loss.

All claims will be assessed on a case-by-case basis.

The bank has also given a commitment to delay the introduction of maintenance fees for all personal current account holders until Jul 2013.

Amid concerns the banking glitch will damage customers’ credit rating, free financial health checks are being offered from the Irish Credit Bureau.

Reports on ratings will be available within five days for customers who have any concerns.

The Irish Payment Services Organisation and the Central bank have said if customers are unhappy, they should contact the Financial Services Ombudsman.

Bernard Sheridan, the Central Bank director of consumer protection said: “While Ulster Bank is required to reimburse and make good any actual losses suffered by customers, the level of any payment for inconvenience suffered is not subject to the Central Bank’s regulatory standards or approval.

“This is a commercial decision for Ulster Bank. Where customers are not satisfied with how Ulster Bank is dealing with them, they may refer their complaint to the Financial Services Ombudsman.”

Despite the massive compensation bill, Ulster Bank does not believe it will suffer any long-term damage due to the technical glitch.

Mr Browne said Ulster Bank had been operating in Ireland for 176 years and hoped they would be able to stay operating here for another 176 years.

“We’ve had incredible support from out customers, there hasn’t been any increase in account closures or funds being transferred out of the bank,” he said.

Cash splash

What can you get for €25? Socks, chickens, or booze, the choice is yours.

At least one bar in Dublin has decided to stretch the Ulster Bank windfall. The Grafton Lounge is offering customers €50 worth of food and drink for €25 when they show an Ulster Bank card.

If going out is not your cup of tea you could get a week’s worth of Superquinn whole chickens.

And if chicken doesn’t whet your appetite, an Eddie Rocket’s family special of two adult meals and two rocket junior meals is also €25.

A more long-term investment is a pair of socks. Louis Copeland has Paul Smith cotton socks reduced from €25 to €20, or ladies can splash their Ulster Bank cash on a single stick of Dior Addict Lipstick.

If none of the above appeals, @gilesbrody on twitter reckons €25 could allow you to replace your bank with a top of the line money box. — Vincent Ryan