March 06, 2025
Barclays Ordered to Pay £12.5 Million in Compensation for IT Outages
In a significant development, Barclays has been ordered to pay up to £12.5 million in compensation to customers affected by a series of IT outages over the past two years. The decision comes after numerous disruptions left customers unable to access their accounts, make payments, or complete transactions, causing widespread frustration and financial inconvenience.
The most recent and severe outage occurred at the end of January 2025, coinciding with payday for millions of workers and the deadline for self-assessment tax returns. This incident, which lasted several days, saw more than half of online payment attempts fail, leaving many customers stranded without access to their funds. The outage was attributed to a severe degradation in the bank's mainframe computer, a critical system used for bulk data processing.
Barclays has acknowledged the impact of these outages on its customers. Vim Maru, Barclays UK Chief Executive, stated, "We recognize that through no fault of their own, some of our customers and clients may have suffered loss, distress, and inconvenience. We are committed to addressing these issues and ensuring that our systems are robust and reliable."
The compensation package includes between £5 million and £7.5 million for the January 2025 outage alone, with an additional £5 million allocated for other incidents that occurred between January 2023 and February 2025. This makes it one of the largest compensation payouts by a UK bank in recent years.
The Treasury Committee, which has been investigating IT failures across major UK banks, highlighted that Barclays is not alone in facing such issues. Data revealed that nine of the top banks and building societies in the UK experienced a total of 803 hours of outages over the past two years, equivalent to more than 33 days of downtime. The committee is examining the root causes of these failures, which include problems with third-party suppliers, system changes, and internal software malfunctions.
Dame Meg Hillier MP, Chair of the Treasury Select Committee, emphasized the importance of reliable banking services, especially for those living paycheck to paycheck. "For families and individuals, losing access to banking services on payday can be a terrifying experience. The fact that there have been enough outages to fill a whole month within the last two years shows that customers' frustrations are completely valid," she said.
Barclays has assured customers that it is taking steps to prevent future outages and improve the resilience of its IT systems. The bank is also working closely with regulators to ensure that compensation is distributed fairly and promptly to those affected.
As the investigation continues, the spotlight remains on the banking sector's ability to provide reliable and secure services in an increasingly digital world. The Barclays case serves as a stark reminder of the critical importance of robust IT infrastructure in maintaining customer trust and confidence.
