BANK ON IT
Major bank to pay £12.5MILLION in compensation to customers hit by massive outages
That figure does not include Barclays' recent outage
A MAJOR bank could pay out up to £12.5million in compensation to customers affected by service outages over the last two years.
Barclays customers are in-line to receive redress after an outage led to days of payment disruption at the end of January.
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But that's not all - Barclays has also revealed in a letter to MPs that it is preparing to issue payouts for other outages that have occurred since January 2023.
There has been more than 33 days' worth of unplanned tech and system outages in the last two years for nine of the UK's biggest banks and building societies, according to new data published by the Treasury Committee.
The committee – a cross-party group formed of 11 members – asked the lenders' UK chief executives to reveal the scale of recent IT failures and estimates for how much customers might be paid in compensation.
It comes after an outage led to days of disruption for Barclays customers at the end of January, coinciding with payday for many workers and the deadline for self-assessment tax returns.
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Barclays confirmed that, during that incident, more than half of attempts to make an online payment failed.
The bank estimated that it expects to pay out between £5million and £7.5million in compensation for the specific outage, adding to an estimated £5million for other incidents between January 2023 and January 2025.
Vim Maru, Barclays UK chief executive, wrote in the letter published to by the Treasury Committee: "We acknowledge that through no fault of their own, some of our customers and clients may have suffered loss or distress and inconvenience."
The outage occurred because of a software problem in a part of its UK mainframe operating system, and was not triggered by a cyber attack, Barclays told the committee.
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Across the nine banks and building societies, there have been at least 158 IT failure incidents between January 2023 and February 2025, according to estimates they provided.
That figure does not include Barclays’ recent outage, nor disruption to other banks' online services in more recent weeks.
Common reasons given for the incidents include problems with third-party suppliers, disruption caused when systems were changed, and internal software malfunctions.
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MP Dame Meg Hillier, chairwoman of the Treasury Committee, said: "The fact there has been enough outages to fill a whole month within the last two years shows customers’ frustrations are completely valid.
"The reality is that this data shows even the most successful banks and building societies hit technical glitches.
"What's critical is they react swiftly and ensure customers are kept informed throughout."
She added: "I am particularly thankful to those who are compensating their customers well for the stress they endure and would encourage all to reflect on whether they are doing enough in that regard."
The Sun recently spoke to a single mum who was left homeless after the recent Barclays IT glitch stopped them from completing on their new house.
How can I check if my bank is down?
THERE are a few different ways to find out if your bank is experiencing an outage.
Senior consumer reporter Olivia Marshall explains how you can check.
If you're trying to send money to someone, or you just want to check if you have enough cash for a coffee, finding your online banking is down can be a real pain.
Most banks have a dedicated news page on their website to show service problems, including internet banking, mobile apps, ATMs, debit cards and credit cards.
You can also check on any future work they have planned and what it might mean for you.
Plus, you can check websites such as Down Detector, which will tell you whether other people are experiencing problems with a particular company online.
How do I claim compensation after an outage if I'm left out of pocket?
Banks are not obligated to provide to customers for service disruptions in the same way telecom companies are.
However, if you have incurred additional costs directly as a result of a service issue, you may be entitled to reimbursement.
For example, if a bill payment fails to go through due to an outage and you are charged a late payment fee, you should be able to claim that money back.
Similarly, if your credit rating is impacted or you are penalised with late payment fees because a transaction could not be completed, it’s important to keep a record of these incidents.
Banks will generally assess claims on a case-by-case basis, taking into account individual circumstances.
However, if you've been impacted you should lodge a formal complaint.
To do this, contact your bank and provide a detailed record of all instances where you faced additional costs, charges, or fees as a direct result of the service disruption.
This could include photocopies of bank statements showing missed payments, receipts, invoices, or other evidence of expenses incurred.
For more specific guidance, you can visit your bank's complaints page.
If you are unhappy with the compensation offered you have the option to escalate your complaint.
This can involve taking your case to the Financial Ombudsman Service, which offers an impartial review of disputes between customers and financial institutions.
The FOS can usually get involved 15 days after you first raised concerns with the bank.
For IT system outages at a bank, the FOS says the compensation depends on your situation and if you lost out as a result.
But if it thinks your bank has done something wrong and treated you unfairly, the FOS can ask it to put things right on your behalf.
It could include telling the bank to pay compensation to:
- Make sure you do not end up out of pocket
- Recognise the inconvenience and trouble you've been through
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It can also tell the bank to take steps to ensure you’ve not lost out any other way - for example by telling it to correct your credit file.
To launch a complaint with the FOS, visit financial-ombudsman.org.uk/consumers/how-to-complain.
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