Rachel Fieldhouse

Money & Banking

Millions paid out in Christmas banking bungle

Millions paid out in Christmas banking bungle

A UK bank made a costly Christmas mistake by paying a total of £130 million ($AUD 245 million) to customers on December 25.

In a statement released on December 30, British lender Santander said the large sum was split over 75,000 transactions from about 2000 businesses with accounts at the bank.

“We’re sorry that due to a technical issue, some payments from our corporate clients were incorrectly duplicated on the recipients’ accounts,” the bank said.

“None of our clients were at any point left out of pocket as a result and we will be working hard with many banks across the UK to recover the duplicated transactions over the coming days.”

The bank blamed the duplicated payments on a scheduling issue, with the second payment funded by Santander.

Santander added that the transactions included regular and one-off payments which may have included supplier payments or wages.

Initial reports from The Times said account holders included Barclays, Virgin Money, and HSBC.

According to the statement, Santander is working to recover the funds from rival banks who received the payments through the “bank error recovery process”.

However, it was unclear how the banks would respond if customers had already spent the money, where asking customers to repay the funds could push them into overdraft.

A payroll manager affected by the error told the BBC it had cast a shadow on Christmas and Boxing Day.

“It ruined my holiday period because I thought I’d paid out hundreds of thousands in error - I thought I had done something wrong,” they said.

“I thought it was just me and that I was going to get in trouble at work.”

The manager added that Santander hadn’t said how the second payment should be explained to staff or how the funds would be recovered.

“It’s just a complete shambles,” they said. “How they are going to recover it, I just don’t know.”

Santander UK - a subsidiary of global bank Banco Santander - has 14 million active customers and 616 branches, according to its website.

Image: Getty Images

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