BoI customers who withdrew cash during blackout won't face damaged credit ratings

Bank of Ireland CEO Myles O’Grady said: “We know we need to do better in future. We continue to invest in our technology to ensure customers have the very best banking services.”

Bank of Ireland customers who withdrew up to €1,000 in this week’s banking services blackout may not have their credit rating affected if they don’t have an existing overdraft arrangement, the Central Bank has confirmed.

Earlier in the week, a Bank of Ireland spokesperson warned customers who had withdrawn sums of cash up to €500 or transferred up to €1,000 onto Revolut cards during Monday’s technical failure that an unauthorised overdraft on their account could impact their credit rating.

“Where debits or overdrafts aren’t repaid over the long term it can impact a person’s credit rating,” they said.

However, the Central Bank has said customers who made such withdrawals who did not have an existing overdraft facility on their account may not see their credit rating impacted.

Banking customers need to be in violation of a loan agreement, which includes overdrafts, in order to be reported by Bank of Ireland to the Central Credit Register (CCR): the CCR dispenses data used by lenders to draw up credit ratings.

“In a scenario where a person has a current account with no overdraft, but nevertheless runs up an overdraft, and presuming that the underlying terms and conditions do not provide for an overdraft, then there will be no underlying credit agreement to report to the Central Credit Register,” a spokesperson for the Central Bank said.

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“In such instances, lenders may wish to engage with the customer and create a new credit agreement for the overdraft, which may then be reportable, depending on the amount involved.” 

Brendan Burgess, Founder of the Consumer Forum Askaboutmoney.com, said he was astonished at the loophole when he asked the Central Bank to clarify how customers' credit ratings would be affected.

"It never occurred to me that they would actually have to have a loan agreement and be in violation of it to get a bad credit record,” Mr Burgess said.

“It was only when someone mentioned it on askaboutmoney that I immediately contacted the Central Credit Register. When I got no answer from them I contacted the Central Bank, who replied.

It's astonishing that these guys could borrow again and no other bank or credit union would know that they were thieves with money owing to Bank of Ireland. That is a flaw in the system. 

"To be fair, the designers did not envisage system collapses where people could withdraw large amounts of money without authorisation.” 

Bank of Ireland has now offered temporary interest-free 90-day overdrafts to customers affected by the banking glitch.

“We have put a number of supports in place for customers impacted by the outage, including interest-free temporary overdrafts,” Bank of Ireland CEO Myles O’Grady said in a statement on Friday. 

“Contact centres and branches are here to help customers, including a dedicated team for those impacted by the outage.” 

Mr O’Grady offered an apology on Friday and urged any Bank of Ireland customers impacted by this week’s incident and who may find themselves with an unauthorised overdraft to contact the bank “so we can work together to find an appropriate solution”. 

“We fell well below the standards our customers expect of us and I apologise sincerely for this. Banking is based on reputation and trust. We have damaged this with our customers and wider society. We are working to put things right.

“We know we need to do better in future. We continue to invest in our technology to ensure customers have the very best banking services.”