Brendan Burgess: Bank of Ireland’s technology failure was no excuse for theft

Bank of Ireland’s mistreatment of customers is no excuse for theft.

On Tuesday afternoon, some customers of Bank of Ireland could not access their account online to see how much money they had. If they subsequently withdrew €200 and inadvertently went into the red, they are not to blame. They should not face any consequences in terms of interest or charges for going overdrawn.

But anyone who queued up at an ATM on Tuesday night to exploit Bank of Ireland’s computer breakdown by withdrawing money that they knew was not in their account is a thief. Taking money that does not belong to you is theft.

Many of these thieves made it clear that they had no intention of repaying the money. They were simply going to open an account with another bank or credit union to receive their wages or social welfare payments and Bank of Ireland could sing for its money.

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Some tried to justify it by claiming that Bank of Ireland has been robbing customers for years and this was payback time.

Bank of Ireland’s treatment of its customers in the past has, at times, been disgraceful. It wrongfully denied cheap tracker mortgages to thousands of customers. Along with other Irish banks, it charged the highest mortgage rates in the euro zone for most of the past 10 years. It pays very little interest on deposits.

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

But there are proper ways to challenge a bank’s mistreatment of its customers. A combination of consumer campaigning, complaints to the Financial Services Ombudsman, and Central Bank of Ireland intervention resulted in Bank of Ireland restoring the trackers to those who had lost them incorrectly.

In addition, the Central Bank imposed a record €100.5 million fine on Bank of Ireland for its mistreatment of tracker customers. For years, I have been calling on the Minister for Finance and the Central Bank to take action on unreasonably high mortgage rates. While my calls have fallen on deaf ears, I expect that eventually the Central Bank or a new minister for finance will take action. And while it’s not very easy to switch mortgages to get a lower rate, it is easy to move one’s deposits to another bank paying higher deposit rates than Bank of Ireland.

Impose sanctions

Bank of Ireland has been criticised for inadequate investment in its computer systems, and rightly so. In November 2021, the Central Bank fined it €24 million for a “failure to have a robust framework in place to ensure continuity of service for its customers in the event of a significant IT disruption”. I have no doubt that the Central Bank will investigate the recent failures and that it will impose sanctions if appropriate.

Politicians and ministers were quick out of the traps to condemn Bank of Ireland’s systems failure. The Minister for Finance Michael McGrath asked for a full report from the Central Bank on why Bank of Ireland’s systems failed. The usual suspects criticised the gardaí for attending at ATMs to keep order. The Irish Council of Civil Liberties criticised the gardaí, saying that “there must be a clear legal basis if gardaí are involved in actions that restricts people’s rights, movement or ability to access finance”.

A very small segment of the population exploits the fact that it’s virtually impossible for a bank to repossess their home, so they have made no mortgage repayments for years

I have no doubt that the Oireachtas Finance Committee will haul in Bank of Ireland and the Central Bank to review the issue.

But why has no politician or minister condemned the people who stole money from Bank of Ireland? Politicians should not be mealy-mouthed. They should call out criminal behaviour for what it is. The vast majority of Irish people are honest and would fully support any politician who condemned the disgraceful behaviour we saw on Tuesday night.

[ If Irish banks raise interest rates for savers, mortgage costs will increase too ]

It’s the same with mortgage arrears. A very small segment of the population exploits the fact that it’s virtually impossible for a bank to repossess their home, so they have made no mortgage repayments for years. Yet not a word of criticism from Irish politicians. Instead of making it easier for the lenders to deal with serious defaulters, they make it more and more difficult.

The vast majority of Irish people are honest. But they end up paying higher prices to compensate for the small minority who exploit the system.

It’s time for our politicians to provide real leadership and to not be afraid to condemn misconduct.

Brendan Burgess is the founder of the consumer forum Askaboutmoney.com