Bank blunders can be costly

By SIDDIKA KHALIQUE
Updated:

 

READ your bank statement properly because computer blunders are on the increase and many of them could be costing you cash.

More than 60% of customers are short-changed by their banks at some stage at a cost of £20m to £30m a year, according to the National Association of Bank and Insurance Customers.

And the Financial Ombudsman's office has received 15% more complaints in the last year about banking bungles that left customers out of pocket. Grumbles about interest payments in savings accounts were up by 83%, mortgages by 8% and current accounts by 12%.

Last week, NatWest customers were debited twice for cash machine withdrawals and many then incurred a penalty because they were pushed into the red. But most of those who were have not even noticed. The bank refuses to reveal how many customers were affected but says it is now checking 6.5m accounts.

Also this month, Halifax discovered computer miscalculations on mortgages with Leeds Permanent, which it acquired in 1989. Around 12,000 customers paid £50 too much interest but 9,000 of those don't appear to have noticed either. The bank has traced only 3,000 of them.

Mark Hemingway, spokesperson for the Halifax, says: 'We're still trawling through computer records, trying to trace the remainder who've closed their accounts.'

Also, back in June, 500 Abbey National guaranteed income bond customers received a demand to pay the bank £20,000 each. This is because the bank had mistakenly paid out extra windfall payments through its automated clearing system and then realised its mistake and made the demand.

Stuart Cliffe, chief executive of the National Association of Bank and Insurance Customers says he receives 2,000 complaints every month about banking errors. Common blunders include direct debits charged twice, incorrect standing orders, money paid into and out of the wrong accounts, and unexplained increases in bank charges.

“You would've thought banks and building societies would make their systems idiot-proof,” he says.

But it's not all bad news. Another 28,000 holders of mortgages from Leeds Permanent have received an unexpected bonus when a miscalculation left each of them £175 better off. They will not be asked to repay the money.

How to spot bank blunders:

• Check overdraft charges are correct

• Keep an eye out for direct debits, standing orders and credit card transactions you don't recognise

• Check your balance is what you're expecting

• Keep a record of cheques written, (amounts and recipients) on the counterfoil and compare it with your statement

• Make sure your salary figure is correct

• Keep cash machine receipts to check against your statements

If you think you are a victim:

• Ring your bank or building society and query the mistake

• If they don't respond, follow the bank or building society's formal complaints procedure. This will involve putting your complaint in writing. It may take them up to two months to reach a decision

• If you are unhappy with the reply, the Banking Ombudsman is your next port of call. The ombudsman will act as an adjudicator between you and the bank/building society.

• If the Ombudsman sides with the bank, your last resort is the courts: County Courts for amounts up to £3,000 and the High Court for amounts over £3,000.

How do I complain effectively?

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