HSBC glitch sees thousands not paid
Thousands of people have not been paid ahead of bank holiday weekend after a glitch with HSBC’s payment systems.
The bank says up to 275,000 BACS payments used by its business customers are affected.
Businesses have been unable to make salary payments or pay suppliers as a result, meaning that individuals and companies with other banks are also affected.
Those caught up in the chaos may find themselves having to use their overdrafts unexpectedly, which may incur fees, unable to make payments or withdraw cash if they have insufficient funds available.
The bank has apologised. In a statement it said: “There has been a fault in the information used to process some payments from HSBC business customers.
"Approximately 275,000 payments have been affected, including payments to customers of other banks.
"HSBC apologises for the inconvenience this has caused. We are taking immediate steps to ensure the payments reach beneficiaries as quickly as possible.
"We will work with other banks to ensure that customers do not lose out as a result of today's problems."
It has not yet been able to give any indication of when the affected payments might be made.
If you have been affected and incur any fees for late payment or for using an unauthorised overdraft, HSBC is responsible for refunding you any consequential loss.
Keep a record of any charges you have had to pay and contact HSBC directly if you are a customer to make a complaint and request compensation. Customers of other banks should contact them to arrange a refund and their bank will then settle up with HSBC.
While Friday is a popular day to finalise house purchases – particularly on bank holiday weekends – would-be movers whose solicitors send and receive money by BACS, rather than the much more widely used telegraphic transfer or CHAPS systems, could find that their purchase or mortgage monies cannot be transferred.
The consequence could be that homebuyers find themselves parked outside their new properties unable to move in.
However, one solicitor told Moneywise that none of their firm’s 160 completions taking place today have been affected.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
The Clearing House Automated Payment System processes and settles time-dependent payments through its two payment schemes: CHAPS Sterling and Faster Payments. Faster Payments is similar to BACS but boasts much speedier transaction times (hours rather than days). The system processes in excess of £70trn annually.
Created in 1968, BACS is a not-for-profit industry body, owned by 16 of the leading banks and building societies in the UK and Europe. All direct debits, standing orders, credit card payments, personal loans and the vast majority of salary cheques are processed through BACS. In 2010, 5.7 billion UK payments with a total value of £4.06 trillion were processed through the system.