What happens to people who withdrew money during Bank of Ireland’s tech meltdown?

What happened with Bank of Ireland this week?

On Tuesday, the bank’s online services were not functioning as normal, with many cut off from its app and website. Tasks such as transferring money and checking balances were impossible for some customers. As the day progressed, the problem became more serious, with unexplained sums of money appearing in people’s accounts.

It then moved from the virtual into the physical world, with some able to transfer money they did not have from Bank of Ireland accounts to external accounts held in institutions such as Revolut and then withdraw that cash.

Is that why there were so many people queuing at ATMs on Tuesday evening?

Correct. News spread on social media that the glitch was allowing people to withdraw money that they may not have had on deposit and for much of Tuesday evening there were long lines at ATMs across the State.

Was a lot of money taken out?

Not according to the bank. In a statement issued to The Irish Times on Wednesday, it said the “volume of transactions conducted last night wouldn’t be a significant proportion of our overall transactions volumes through an average day”. They wouldn’t be any more specific.

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But surely any money a customer withdrew would just be debited from their account?

That is correct. Some people may have taken money out in the mistaken belief that there would be no repercussions. On Tuesday night and again on Wednesday morning, Bank of Ireland made it clear that anybody who withdrew money they did not have on deposit while its systems were down would see that money “designated as a debit on their account”.

What does that mean?

It means that if they did not have the funds to cover any transfers or withdrawals, the money taken out will appear as an overdraft on their account – unauthorised unless they had an agreed overdraft facility.

But how will the bank go about getting the money back?

For some accounts, it will be a relatively effortless process. The next time money is lodged into the account, a portion of it – or all of it – will be used to clear the amount debited on Tuesday night. For people who use their Bank of Ireland accounts infrequently, getting the money back will be trickier.

Trickier? Does that mean customers will get to keep the money?

No. Banks are fairly relentless when it comes to pursuing money they are owed and a spokeswoman warned that where “debits or overdrafts aren’t repaid over the long term, it can impact a person’s credit rating”.

What caused the problem?

That remains unclear. The bank said a “full and thorough investigation will also occur into the issue” but it stressed that it “wasn’t related to a cyber attack”.

What has the Central Bank said?

On Wednesday evening it released a statement in which it said that “where issues occur which impact on customers, we expect banks to rectify the issues urgently. We require banks to put things right where they have made errors or cause customer harm”.

It said it has engaged with Bank of Ireland to establish a full account of the incident “as it works to resolve these issues and restore services for customers. We expect this process will include understanding the root cause of the recent service disruption and what Bank of Ireland is doing to avoid further disruption for its customers. We are monitoring the situation and will continue detailed supervisory engagement, but are not in a position to release confidential supervisory information regarding any institution.”

It said it expects “all firms to have adequate systems and controls in place to ensure operational resilience, and where issues that impact customers arise they should be addressed and rectified urgently”.

Anything else?

The Minister for Finance Michael McGrath asked the Central Bank to establish a full account of what happened and what can be done to ensure it does not happen again. “Given our growing dependence on technology for the delivery of financial services, I have asked my officials to engage with the Central Bank on its assessment of the robustness of this Bank of Ireland incident, and more broadly the robustness of the technology systems used by regulated, customer-facing financial service providers here in Ireland, and whether any further steps are required to reduce the risk of outages that impact on customers,” he said.

And what about the Garda role?

The presence of gardaí at some ATMs during the IT outage drew criticism on social media and from some politicians. “There is something unnerving about the gardaí being involved in protecting BOI [Bank of Ireland] ATMs last night,” Labour justice spokesman Aodhán Ó Ríordáin said. .

And is the problem fixed?

According to the bank, its technical problems have now been resolved.

So is this the end of it?

You would certainly hope so but it is worth remembering that this is not the first time in recent weeks Bank of Ireland has experienced serious problems with its technology. At the end of June, many of its online operations crashed for almost a full day, forcing the bank to extend its opening hours and work over a weekend to facilitate customers who had been denied regular access to their own money.

But this is surely worse?

It is certainly likely to cause the bank even greater embarrassment and while it will be able to pursue those who have taken money that they do not have on deposit, the reputational damage is likely to be extensive. Shares in the bank had a rocky start to the day but recovered later in the session.