NAB pay bungle hits thousands

* Karen Collier
* From: Herald Sun
* November 26, 2010 9:49PM

NAB pay bungle hits thousands | Herald Sun


FURIOUS consumers are demanding compensation after a NAB computer bungle delayed millions of wages, pensions, family payments and business transactions across Australia.

Tens of thousands of anxious people could still be without cash for the weekend because of backlogs from the shambles.

The IT nightmare left some families destitute, throwing grocery and Christmas shopping, birthday party plans and even holidays into chaos.

Desperate customers told the Herald Sun of having nothing or as little as 10c left in accounts, or plunging hundreds of dollars into overdraft.

One said she had kept her children home from school because she had no money to put fuel in the car.

The NAB's call centre has been in meltdown since a corrupt file disrupted Wednesday's overnight payment process.

The malfunction stalled salaries, Centrelink benefits, contract settlements and property deals, and slowed ATM and Eftpos transactions.

Have you been affected by the delays? Tell us below, phone our newsdesk on 03 9292 1226 or email collierk@heraldsun.com.au.

The problem spread to some customers from other banks and credit unions waiting on wages and other payments from employers, clients and banks that deal with NAB.

Upset consumers demanded compensation for any fees for late mortgage and credit card payments, overdrawn accounts or bounced direct debits charged by any institutions as a result.

Emergency $500 advances were yesterday issued to some customers suffering hardship.

NAB spokesman George Wright said the bank would try to ensure no one was financially disadvantaged through dishonour fees from any organisation.

He denied NAB would pocket extra interest from the debacle.

Wodonga mum Leonie Cox said she was forced to borrow $100 from her mother-in-law to pay for food and nappies.

"This is disgusting. We live from fortnightly to fortnightly pay," she said.

Mr Wright said most people had received missing money.

But he admitted up to 40,000 customers may be waiting until Monday.

Seaford disability pensioner Ann said she had only $20 left in her account after her payment did not arrive.

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According to a report 2pm Sunday (7 hours ago), payments due Thursday had been processed but Friday's were still outstanding. All Australian pension, unemployment and other social security payments are distributed to payees' bank accounts each fortnight, and last Thursday was pension day. Some NAB pensioners may still be waiting for their money.

There has been no public statement as to the exact cause of the problem, except for reference to "a corrupt file", which appears to have required all business since early Wednesday to be reprocessed.

Like Australia's other major banks, NAB runs a disaster recovery/business continuity site remote from its main data centre. But this does not provide resilience against data corruption problems. If I was asked to guess, I would finger a banking system calendar file as the problem. A very large proportion of bank transaction processing is driven by the calendar, including when, whether and how to post transactions to customers' accounts. I emphasise that this is a speculative guess but I recall a similar but less dramatic problem in New Zealand. It happened some years ago when a bank bureau's computer calendar was set to the wrong date.

This disaster is an especially unfortunate hit for NAB, as recently appointed CEO Cameron Clyne has been leading the field in doing away with exorbitant penalties for overdrawn accounts and similar, in moderating housing loan interest increases as the Reserve Bank raises the overnight cash rate, and in preaching the principle that Australia's banks need to listen more to their customers and the community. In an unparalleled initiative, selected NAB branches have been open throughout Saturday and Sunday in an effort to help customers with a cash flow crisis. However the problem is not limited to NAB. Customers of other banks who were expecting payments from a NAB account-holder are twisting in the wind.

It remains to be seen whether an open inquiry will be held with published findings. IBM is the major mainframe and system software supplier to NAB and there may IBM executives currently biting their nails, waiting for more evidence as to exactly what happened.