You are here

22,000 Prudential customers hit by excess GIRO debits

Excess deductions caused by omitted decimal point; wrong debits reversed within 24 hours; interest, charges to be reimbursed

Singapore

SOME 22,000 Prudential customers in Singapore were affected by a "technical glitch" on Thursday evening that led to what is likely an unprecedented error in deductions of monthly insurance premiums, the insurer said on Friday.

The excess deductions were refunded within 24 hours. Because the all-crucial decimal point was missed in certain deductions, GIRO deductions that would typically be in hundreds of dollars ballooned to tens of thousands instead, according to social media posts. This 100-times error may be the first such incident in Singapore, observers said.

The error caused either huge GIRO deductions, or failed transactions if the account balance was less than the wrong amount deducted. The 22,000 customers had amounts deducted in excess of the premiums from their banking accounts, said a Prudential spokesman.

sentifi.com

Market voices on:

However, all transactions were reversed by the banks by Friday afternoon, said Prudential and its payment bank StanChart in their respective media statements. All inaccurately deducted amounts have been refunded to the policy holders, said StanChart.

Prudential has about 900,000 customers here. Wilf Blackburn, CEO, Prudential Singapore, said in a statement: "Since we discovered the error, our priority was to ensure our customers got their money back quickly. We will be reimbursing interest lost and charges incurred as soon as possible. We are truly sorry for the inconvenience this has caused to our customers and would like to thank them for their patience."

Prudential customers were also sent SMSes past midnight on Friday morning, notifying them of the "inaccurate GIRO deduction" due to a "technical error".

BT understands that as long as a bank reverses the respective charges by the end of the day, the customer should not be hit by outstanding and complicated reversal in charges. But complications may arise if, for example, the customer's bank account is automatically linked to an overdraft account. This may lead to an interest charge that was incurred on the erroneous debit. It is also unclear how the glitch may affect customers who were unable to clear subsequent payments because of the large deduction from their accounts.

OCBC Bank on Thursday put out a statement on Facebook at about 9pm, saying that all accounts affected by an error in GIRO deduction requests by Prudential have been rectified. HSBC Singapore on Friday made a similar announcement on Facebook. Prudential Singapore made its Facebook announcement on Thursday.

It is understood that by about 7pm on Thursday, several customers were alerted to the erroneous charges. An online forum was peppered with colourful language from customers who had taken to the forum after being hit with these wrong charges.

The Monetary Authority of Singapore late on Thursday night issued a statement, saying that both Prudential and StanChart would have to investigate the root cause of the incident. It added that this was not due to a cyber attack. BT understands that both financial institutions had swiftly notified the regulator of the incident - a requirement of regulations here.

MAS said in its statement that it will take follow-up supervisory measures where appropriate. It is not uncommon for regulators to issue a penalty for such a "technical glitch". The inquiry report is expected to take a few weeks to be prepared.

Powered by GET.comGetCom