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HMRC internal manual

Banking Manual

Bank compensation restriction: excluded expenses: failure of an electronic system

Expenses arising from issues with electronic systems, including telephony and IT systems, are excluded expenses. This could cover either the bank’s own systems or those provided by other parties. It also includes miscalculations of interest and excessive collections of payments when these are caused by the failure of electronic systems.

There have been high-profile examples of electronic system failures leading to customers being unable to use their bank accounts, and in some cases the Financial Conduct Authority may take regulatory action. Such action does not preclude any redress payments to customers from being excluded under this section.


Bank J’s online banking platform fails, and customers are unable to access their accounts for 48 hours. Although many are largely unaffected, some are severely affected, and the regulator instructs the bank to compensate all affected customers.

This compensation would not be disallowed.