The banking industry's reputation plunged to a new low last night after a more than a million Nationwide and RBS customers were victims of a fresh wave of technical foul-ups.
Nationwide admitted that more than 700,000 of its four million customers who used cards on 24 July were double charged for their purchases the next day. As many as 50,000 of them were pushed into the red as a result.
It also emerged that many RBS customers are enduring new problems with their accounts. Some customers reported that their debit card payments were being turned down, while others found their online banking was not working properly
The state-owned bank refused to say how many people were affected, admitting only that it was "experiencing difficulties" and "working hard" to resolve them.
When RBS experienced technical difficulties last month, customers across the UK were locked out of their accounts. A small number in Northern Ireland were still facing difficulties a month after the problems emerged and Stephen Hester, RBS's chief executive, was forced to pass on a £2m bonus as a result.
Yesterday's fresh wave of banking misery follows Tuesday's problems at HSBC, which were caused by an overseas call centre that was effectively out of service for 45 minutes. The outage was caused by a truck crash, which took out local telephone lines in Manila in the Philippines where the call centre is based.
Nationwide, which is owned by its savers and borrowers, yesterday insisted its problems were not down to such "outsourcing". The society instead blamed an "inputting" error by an operative at its Swindon HQ. The phantom transactions were removed from customers accounts overnight, the bank said.
Jenny Groves, divisional director for customer experience said: "Nationwide wishes to apologise to those customers affected by an issue which has affected some of our debit card customers."
She said those put into the red would have all charges "refunded in full and any costs associated with this error will be reimbursed in full. None of our customers will suffer financial loss as a result of this one-off error".
The Financial Services Authority (FSA) has been informed of the issue, which raises questions about the robustness of Nationwide's systems. The FSA is already investigating how RBS's routine software upgrades went so badly wrong and it is expected to hit the bank with a substantial penalty in what would be the first fine levied for an IT failing. News of the fresh wave of difficulties will only compound the bank's difficulties as management desperately try to put it on a firm footing and exit the Government's "asset protection scheme".
What will worry Nationwide is that the FSA has been pressing banks and building societies to ensure their systems are robust in the wake of the RBS affair. The watchdog wants to nip the problems in the bud before any further consumers are left suffering. Many commentators had recommended Nationwide as an alternative to the derided "big four" banks, particularly RBS, but that could now be called into question.
Richard Lloyd, executive director of consumer body Which?, said: "This again raises wider questions about how robust banks' systems and safeguards are as consumers bear the brunt of yet another banking glitch."
The technical foul ups came on the day the Parliamentary Inquiry into Banking Standards issued an urgent call for evidence. It will consider the impact of the collapse in standards in banking and make recommendations for potential changes to legislation by the middle of December.
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