What to do if you have been affected by the IT issues at NatWest

How many people are affected?



NatWest has at least 7 million UK customers and almost one million small business customers. Parent RBS said a smaller number of RBS customers were affected, and Ulster Bank also faces the same issue. The bank said the problems have affected all accounts; savings and offset mortgages, as well as current accounts.

When did the problems start?



NatWest says they began with processing of payments overnight on Tuesday, that started causing problems for customers on Wednesday morning. This escalated on Thursday and continued all day on Friday.

What caused it?



NatWest has been unable to say what the problem is, although its last statement on Friday said that it was due to "a system outage" on Tuesday that has now been resolved, but that this has caused a backlog.

IT experts have been quick to suggest what might have been the cause. Darren Reevell, of Anicetus Consulting, suggested the problem could have originated from a "poor code release combined with poor testing and poor recovery processes". If true, it would mean NatWest attempted to roll out a software upgrade that backfired, causing damage to its existing IT infrastructure.

David Silverstone, delivery and solutions director at banking technology specialists NMQA, said the glitch was almost inevitably caused by the introduction of a change. "This would be either a software or hardware upgrade to either the bank's payment processing systems or the mainframe systems that handle the actual account data. If an upgrade is not sufficiently tested first, then this sort of problem occurs."

What is the bank doing to resolve it?



The bank kept 1,000 branches open until 7pm on Thursday and opened at 8am on Friday to help customers. But at least three days after the problems began, it has still not solved the issue. Branches will stay open on Saturday until 6pm, and will also be open on Sunday between 9am and 12pm. A bank spokeswoman said: "If people are facing immediate financial difficulties as a result of this problem they should phone our call centres or visit a branch."

What can you expect the bank to do if you have been affected?

NatWest has confirmed that "no customers will be permanently out of pocket as a result of this", and a spokeswoman for the Financial Services Authority confirmed that NatWest would be responsible for any charges customers are liable for, or interest they need to pay as a result of the bank's error.

But the FSA said there is nothing in its rules that says NatWest would have to pay consequential losses. This was echoed by the Financial Ombudsman Service, which said that if the bank error has led to a customer being out of pocket, the bank should ensure that consumer is put back in the financial position they were in before the error was made.

The FSA said there was nothing in its rules that required the bank to pay for non-direct losses, such as someone being unable to pay a hotel bill or purchase flights at the price they wanted. The ombudsman suggested customers who face consequential losses such as this should keep a record and complain to the bank. If the bank rejects the complaint they can take their case to the ombudsman.

The FSA fell short of saying that RBS would face any regulatory action as a result of its IT issues.

It is unclear what people who have suffered financial loss but who are not NatWest customers should do.

Will problems caused by the bank affect my credit rating?



If customers have missed payments because of the IT error they may find they have exceeded their agreed overdraft limit, or incurred late payment fees from lenders.

One of the major credit reference agencies, Experian, says it has spoken to NatWest and received assurance that any overdraft activity (unauthorised borrowing or bounced cheques for example) caused by the IT error will not be recorded on a customer's credit files.

Experian spokesman James Jones said: "Other creditors should not register as late any payment to them until it is late by at least seven to 10 days. This is an agreed industry standard. So, assuming this is a short-term blip, as long as any delayed payments are subsequently made, these should not show up on someone's credit file."

Anyone who has been hit with late payment fees should be able to claim these back from NatWest.

What effect is this going to have on NatWest longer term?

Jonathan Hemus, director of Insignia, a specialist in reputation management and crisis communications, said that unless NatWest can demonstrate that it can communicate how it is dealing with the situation professionally, its longer-term reputation could suffer.

"It's not having a crisis that harms an organisation, it's how you deal with it that's key," he said.

"NatWest has tried – keeping branches open late and opening them early was a smart move – but it's about tone of voice. NatWest has simply broadcast messages to people, but in the age of social media you need to be more interactive if you are to win over the public.

"HSBC was much more successful when it had a similar problem last year. Not only did it tweet much more frequently, it did so with a really human tone. NatWest needs to show it cares about what happened, demonstrate it is on top of the situation and is dealing with it. At the moment, it's unclear if it is doing this."

Should you switch banks?

That largely depends on how you think NatWest has dealt with the issue. Customers should consider things such as whether they have been able to speak to someone at the bank during the debacle, whether they have been offered any assistance financially and whether they feel reassured this is a one-off problem.