Category Archives: European IQ Trainwrecks

Bank overcharging in Ireland (again)

Leave a reply

In a taste of the change of emphasis that is seeping through the global financial services industry, the Irish Financial Services Regulatory Authority is pursuing 24 cases of overcharging by banks and insurance companies, according to this morning’s Irish Independent

Of course, stories of financial services overcharging and other information quality disasters in that industry are not new to the IQTrainwrecks reader. Over the years we’ve covered them here, here, here, here, here , here, here, and here (to select just a few).

We’ve also covered the growing “hard touch” trend in Financial Services that is bringing a clear “cost of non-quality” to bear on banking/financial services processes (see this post from August of last year).

Why is this now an IQTrainwreck again?

  • Regulators are adopting a tougher line with banks about overcharging/undercharging (a bit like the regulators did in my former industry – telecommunications).

The new chief of the Irish Financial Services regulator is concerned about the number of overcharging cases and recently said that:

It is clear from recent cases that change is needed in how firms handle charging and pricing issues.

  • Financial services companies, facing into severe cutbacks in budgets and man power are potentially increasingly exposed to the risks of manual work arounds in processes simply stopping, end-user computing controls not being run,  and ultimately inaccuracies and errors creeping into the information they hold about the money they hold for or have loaned to customers.

As the regulatory focus shifts from ‘light touch’ to ‘velvet fist’, those financial services companies who invest in appropriate strategies for managing the quality of information in a culture of quality will be best placed to avoid regulatory penalties.

The perils of perpetuating errors

Leave a reply

Courtesy of Dataqualitypro.com on twitter comes this story about how Virgin Media in the UK have sent a letter to a customer prospect addressing them as “Mr Illegal Immigrant”.

Virgin Media have investigated the issue and state that it was an isolated incident arising from data purchased from a 3rd party. This suggests that Virgin Media might have issues with the quality control processes they apply to vetting data purchased from 3rd parties.

From an IQ Trainwrecks perspective, this ticks a lot of boxes as it has resulted in embarrassment for Virgin Media and hassle and trouble for the actual householder, a Mr Needham who told the Daily Telegraph that:

… he was offended by the letter: ”I was a bit shocked. I was taken aback. I have tried to ring up and complain and they have not really done anything about it.

”They kept passing me from pillar to post. They tried to say it was not their fault, it was somebody else. It is not good.” Continue reading →

Know your customer, know yourself

2 Replies

From today’s SUN tabloid newspaper in the UK comes this great story about how automated processes without adequate business rules and checks on information can cause embarrassment.

It seems that local government authorities in the UK have been fining themselves for parking offences and then suing themselves when the fines aren’t paid. Things have even gone as far as councils seeking awards of legal costs against themselves when they haven’t complied with their requests to themselves to pay themselves the fines that they imposed on themselves for parking their vehicles in places where they had decided people shouldn’t park.

It seems that none of them have yet tried to argue the defence that was put forward in Ferguson vs British Gas.

The lesson here is that when defining an objective in a process one should take the time to consider the various scenarios that might occur in that process and then ensure you have adequate checks and balances and controls to prevent embarrassing and costly errors from occurring.

Oh… and knowing that your customer is yourself is also a good idea.

You can’t make an omlette with out breaking a few Eggs

1 Reply

A correspondent in the field, Nic Jefferis has sent in this story about how a “database glitch” has affected customers of the Egg on-line bank who have been trying to pay their bills using their NatWest debit cards.

The BBC describes the problem very succintly:

“The problem is that the Egg website does not recognise Natwest Visa Debit cards as being legitimate cards.”

The root cause seems to stem from the fact that key base data used by Egg’s on-line bank, the valid set of Bank Identification Numbers, appears to to not include NatWest Visa debit cards as they are only being rolled out at the moment to replace the existing Maestro Debit card facility currently in use at NatWest.

And at this point the second common component of IQTrainwrecks raises its head – who is responsible for the data.

Egg get their data from Experian. As soon as the problem arose, Egg contacted Experian to get a solution.  Natwest state that they were “aware of this problem and raised it with Egg at the outset” and were waiting for Egg to sort out the problem in their systems.

Somewhere in the process for maintaining BIN master data something has gone awry which has affected the ability of NatWest customers to pay bills using their new Visa debit cards. As the problem appears to be in the underlying base data, it is possible that there are impacts wider afield than just Egg’s payment systems.

As a source quoted in the BBC report says, this should be a straightforward process and an error like this would be highly unusual. But as we know here at IQTrainwrecks, it is often the simple errors that can have the biggest knock on impacts in downstream systems and processes resulting in loss, damage, injury, or frustration.

Slovak Police accidentally cause Terror Alert in Dublin

2 Replies

The Irish and International media have been busy the past few days covering the story of the horrendously botched security test by Slovakian Border Police which resulted in 90 grams of high explosive RDX finding its way to Dublin from Bratislava in the backpack of an unsuspecting Slovakian electrician who was travelling back to Ireland after Christmas at home. This lead to a street in Dublin City Centre being closed this past Tuesday, with homes and businesses evacuated, while police and Army bomb experts raided the innocent electrician’s home to secure the explosives.

A full timeline for the story can be found here.

This is a tale which has a number of classic elements of an IQTrainwreck about it. Continue reading →

Perhaps they should have checked their listings twice?

Leave a reply

The Irish Sunday Independent reports this past weekend that the Irish State Broadcaster RTE is facing legal action from its erstwhile privately owned competitor TV3  arising from what are described as “significant and egregious” errors in the listings published for TV3’s programmes over the Christmas period in the RTE owned listing’s magazine “The RTE Guide”. The errors affect listings over the core Christmas period and also the time of one movie which is due to be broadcast tonight at 9pm but which is listed incorrectly in the Guide.

In a wonderful example which highlights the potential downstream cost and revenue implications of poor quality information, TV3 says the error is so serious that it could have a fundamental impact on its Christmas viewing figures.

And, in TV-land, viewing figures translate into hard-to-come-by-in-a-recession advertising revenues.

TV3 have asked for RTE to pulp all copies of the RTE Guide still in shops and to replace them with reprints which show the correct listings. Failing this, they have asked RTE to give prime-time advertising coverage on TV and radio to TV3 programmes over the Festive Season, which would have the effect of reducing the prime-time advertising slots which RTE would have already sold over Christmas, hitting RTE’s revenue streams as well.

RTE, for their part, blame a 3rd party supplier for the errors.

Of course, this writer’s thoughts are with the ultimate information consumers here… the viewing public. If my house as a teenager was anything to go by, the RTE Guide will have been used as the basis for negotiations about who gets to see TV ‘live’ versus programming the video recorder.

A while ago, Daragh O Brien wrote on his blog about the likely rise in Information Quality litigation, particularly as studies have shown that people become more litigious during a recession. This looks like one of those cases and it seems 2010 will be an interesting year for Information Quality management principles in Ireland.

Information Quality – Every Little Helps

Leave a reply

[Thanks to Tony O’Brien for sending this one in to us recently. For those of you not familiar with Tesco and their marketing slogans, this is their corporate website.]

ManagementToday.com has a great story (from 25th November) of how six bicycles purchased by Tesco from a supplier came with an apparent£1million (US$1.62 million) price tag.

Some red faces at Tesco HQ this morning, after news emerged that Britain’s biggest supermarket accidentally paid one of its suppliers almost £1m for six bikes.

The unit cost for each bicycle turns out to be a whopping £164000 instead of the usual £164.

While the majority of the money was repaid, the trouble for Tesco is that they are engaged in a dispute with the supplier in relation to other matters so the supplier has held on to 12% of the money. So Tesco have called in their lawyers. Which means that the total cost of failure will inevitably be much higher by the time the whole mess is sorted out.

Of course, simple consistency checks on data entry could have trapped that error and saved Tesco money and embarrassment.

It seems that with Information Quality, as with Retail Grocery, every little helps.

No smoke without ire – Life Insurance Overcharging in Ireland

Leave a reply

RTE News in Ireland ran a story last night on overcharging by Irish Life Assurance companies arising from a mis-classification of customers as smokers. (link to the item is here, but you may not be able to access it if you are not in Ireland).

On foot of two complaints, the Irish Financial Services Ombudsman investigated two companies and has identified up to 500 customers affected.  However more customers may be affected in other companies .

The two companies affected blamed “computer and administrative errors” for the misclassification and the resulting overcharging. In other words, an Information Quality problem.

The financial impact for the two customers who complained was between €1100 and €2500 on policies of different lengths. Taking a crude average value, this would suggest that for the 500 cases the Ombudsman suspects in the two companies he looked at the total cost of refunds will be in the order of €900,000.

The cost of the investigation of possible errors and the correction of records would, of course, be on top of this amount.

The Financial Services Obmudsman has asked the Irish Financial Services Regulator to conduct an industry wide audit of all Life Assurance companies to identify further instances of this kind of overcharging based on misclassification of customers. As a result, the total amount of refunds will inevitably rise, as will the cost to the industry of inaccurate information.

The news report makes no mention of the potential Data Protection issues arising here under Irish Data Protection law, which does require information to be kept accurate and up to date. But the Irish Financial Ombudsman used to be the Data Protection Commissioner, so I am sure he has flagged that to the affected institutions himself.

Lost in Translation

Leave a reply

Not a trainwreck in the strict sense of the word or on the scale of other cases we’ve logged recently, but this story from the Irish Examiner does illustrate the importance of language and terminology in communicating important information. Breakdowns in the transfer of important information can often cause distress and a failure to meet expectations.

It seems that on an Aer Lingus flight to the US the crew were warning passengers of turbulence and advising them to return to their seats. Unfortunately, the wrong message got relayed in French, resulting in Francophones aboard the flight fearing for their lives as the message they heard was that they were to prepare for an emergency landing, which over the Atlantic could only mean ditching in the ocean.

Thankfully this was not the case, but there were a few worried minutes until cabin crew realised the error, apologised to passengers and calmed everyone down.

Similar miscommunications happen all the time in business and IT where there are subtle difference in the meaning of words used in niche disciplines. For example, to a Marketing person an SME is a Small to Medium Business, where as IT know them as a “Subject Matter Expert”.

Poor Quality Information costs money – and you can take that to the Bank

Leave a reply

via Keith Underdown comes this story hot off the press release engine in the UK’s Financial Services Authority.

Barclay’s Bank have been fined stg£2.45 million for “failing to provide accurate transaction reports to the FSA and for serious weaknesses in systems and controls in relation to transaction reporting”. The fine would have been higher (stg£3.5 million but for the fact that Barclay’s co-operated with the investigation and agreed to settle the matter quickly). According the the FSA press release

“Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.

“The penalty imposed on Barclays is significantly higher than previous penalties imposed for transaction reporting errors. This reflects the serious nature of Barclays’ breaches and is a warning to other firms that the FSA will not tolerate inadequate systems and controls.”

This is an interesting warning that serves as an indicator of how Regulatory systems and enforcement will be changing in a post-Recession world.

Of course, the true cost to Barclays is much greater than the cost of the fine. For one, there is the reputational damage that comes from being fined to this extent by the FSA. And then there is the cost of correcting errors and fixing the defective processes, which Barclays has done “including commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors.”

Reviews and resources don’t grow on trees you know.

This is a clear example of an IQ Trainwreck.