Major bank ordered to pay £12,500,000 to customers hit by outages

Barclays sign. — There have 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 (Picture: Ian West/PA Wire)

Barclays is set to pay up to £12.5 million in compensation to people who have been hit by outages over the last two years.

Customers were left angry after the outage at the end of January caused days of payment disruption.

This coincided with payday for millions of people and for those submitting self-assessment tax returns.

Then again at the end of February, other banks were all down in an ‘industry-wide’ outage.

It is expected that Barclays will pay between £5 million and £7.5 million in compensation to customers for ‘inconvenience or distress’ caused by this years outages, the Treasury Committee of MPs heard.

This is on top of £5 million for other outages from January 2023 to February 2025.

It will be the second highest amount paid out by a firm in the last two years, after the Bank of Ireland.

While Barclays has suffered issues, the nine top banks and building societies had outages totalling 803 hours, with 158 individual IT failures.

?? Licensed to London News Pictures. 01/02/2025. London, UK. Customers queue outside the Wood Green Barclays Bank branch in north London as they face ongoing issues due to a major bank's IT outage. The outage is preventing payments through the branch, online banking, and the app. Additionally, Barclays is unable to assist customers via phone or their online banking service. Photo credit: Dinendra Haria/LNP — Customers queued outside the Wood Green Barclays Bank branch in north London after an outage (Picture: LNP)

The bank with the longest outage was NatWest with 194 hours of failures.

The second longest period of services being down was at HSBC with 176 hours of disruption.

The January outage was caused by a ‘severe degradation’ in the mainframe computer, something used to bulk data processing.

This resulted in the failure of 56% of Barclays’ online payments.

The committee said it is investigating IT problems at all banks to see what the issue is.

Chair of the Treasury Select Committee, Dame Meg Hillier MP, said: ‘For families and individuals living paycheck to paycheck, losing access to banking services on payday can be a terrifying experience.

‘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.’