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I saw many articles reporting that due to a technical glitch a lot of clients of the Bank of Ireland could withdraw big sums at the ATM machines. The spokesperson of the Bank of Ireland declared that those sums will be debited on the customers' accounts. But they did not tell anything more.

I am not familiar with the Irish system, but I had an account in the Anglo-Saxon area and I know that overdraft charges can be hefty. So, I would like to know if those customers will have to pay those charges, if present, even if they went in overdraft due to a technical glitch.

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6 Answers 6

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Under normal circumstances, yes the customers would be facing interest and charges. However, as customers could not see their balance they could have gone overdrawn accidentally, and for this reason the Bank of Ireland are not going to charge. I don't know if this will apply to those who deliberately exploited this bug.

See BOI suggests it won't charge interest to customers who withdrew extra cash during IT glitch

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  • BOI satement seems quite evasive. At they question what are you going to do with interest and charges their reply explicitly mentions interest and overlooks charges. Anyway for the purpose of the question this is the most direct information we can get. At least I can see that things there work more or less like they work in the UK.I'ill mark it as the correct answer although it says that there is no clear answer.
    – FluidCode
    Aug 29, 2023 at 11:04
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It's tricky to know what they can and what they can't do legally.

Obviously if you did withdraw 1000 Euros that are not yours you have to pay the money back. People have actually gone to jail for theft for taking money that way. If you don't pay it back, you will have to pay interest.

Now I have an allowed overdraft on my account that I can just use, and beyond that it is an unallowed overdraft with different (more expensive) rules. If that money was within the overdraft that you were allowed anyway, there should be no problem. If that money was beyond your regular overdraft, then it is hard to say if legally this was an allowed overdraft or not. Most likely not.

For anyone getting into this or a similar situation: If there's money in your account that isn't yours then don't touch it. You may save yourself a lot of trouble. Especially if you used it to buy things that you can't afford, because you won't get away with it.

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    Bank error in your favor, go to jail!
    – GammaGames
    Aug 18, 2023 at 14:17
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    @GammaGames "you took money you knew wasn't yours, go to jail!" sounds a lot more reasonable, doesn't it? Same applies to a workplace that overpaid you: they can demand their money back; don't keep/spend it if you know the amount was wrong.
    – Esther
    Aug 18, 2023 at 17:03
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    @Esther It's a Monopoly reference :)
    – GammaGames
    Aug 18, 2023 at 17:10
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    @GammaGames I can't believe I literally thought of Monopoly when I saw that, but somehow didn't realize it was a joke... ¯\_(ツ)_/¯
    – Esther
    Aug 18, 2023 at 17:16
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    Unless you've withdrawn enough to go abroad / off the grid / buy a fresh ID. In that case... Well, that's one reason for banks to stop treating their IT as a cost to be slashed, but I'd bet 10:1 that no lessons will be learned at C-level.
    – Therac
    Aug 18, 2023 at 21:45
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I read a Dutch news article that says they don't have to pay overdraft fees in this specific case:

Klanten die nu in financiële problemen raken vanwege een negatief saldo kunnen contact opnemen met de bank. Ze hoeven geen rente te betalen over het bedrag dat ze rood staan.

Which translates to something like "Customers that get into financial problems due to a negative balance can contact the bank. They don't have to pay overdraft fees over their negative balance."

Sadly the news article doesn't quote a direct source, but this news site is usually right.

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Most banks have written into their terms of service that in the event of an error by the bank resulting in a misallocation of funds, the account holder must remit any misallocated funds back to the institution within a certain period of time to avoid any overdraft charges. Usually it's within 1 or 2 weeks. So, it depends, and you'll need to read your deposit account agreement, or better yet, contact your bank directly to know for sure.

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    In this specific case, the terms of service for Bank of Ireland do not appear to specify anything other than that the erroneous transfers will be reversed.
    – jpa
    Aug 18, 2023 at 6:36
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    I don't think these are erroneous transfers. They are transfers requested by the customer that would have normally been declined. Aug 18, 2023 at 13:16
  • Note that the bank is far from an unbiased party here, and they wouldn't necessarily tell you what's strictly required as per the law or your contractual agreement, as much as they'd tell you what's in their best interest, (hopefully) within what's allowed by the law or contracts. That's worth keeping in mind, even if it's still a good option if your goal is to avoid conflict, or if you just want to find out what the bank expects.
    – NotThatGuy
    Aug 18, 2023 at 14:43
  • @RobinSalih Having an ATM misallocate funds is an erroneous transfer, whether the account holder knew their balance or not. Aug 18, 2023 at 18:20
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40 years ago, my bank used to do this all the time (but cash limits were smaller then). When the bank mainframe went offline, the ATMS would work autonomously, allowing $200 withdrawals without checking the account balance. After a while, they fixed it so that their ATMs were just (frequently) shut.

The bank did not charge overdraft fees for over-withdrawals like this. It only tried to recover the money.

That bank went out business long ago. I wish I could say that it was because their ATM system was hopeless, but actually it went out of business because of political interference and hopeless risk management.

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Let's suppose I have a bank account with 200 €

The bank in supposed to let me draw those 200 €, but no more.

The IT glitch seems to have made the ATM unable to obtain the current balance, making them to work offline. In this mode, the ATM works disconnected from the network, so it uses some generic limits. Thus, it can let me draw 250 € or 300 €, since it doesn't know how much money I have in my account. (Conversely, I might have a really high limit set, and the ATM -not knowing it- could be honoring a smaller one)

In a normal scenario, the ATM would not have allowed to draw 300 €. Or if it did (you are allowed to overdraft the account up to certain limit), it should had warned that it was subject to X fees. Plus, even if the customers wanted to check explicitly what their balance was prior to drawing the money, it that not available.

Thus, the reasonable approach is what they seem to be following, they debit from the account the amount actually drawed from the ATM, but not collecting extra overdraft charges from what was caused by their own systems malfunctioning.

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