Remediating legacy issues

Being a large Nordic financial institution with more than 22,000 employees and 3.3 million customers, operational issues and errors will unfortunately occur from time to time. It is our commitment to our customers that we work hard to avoid them altogether and to ensure to correct them as soon as we identify them.

However, in our efforts to become a better bank, we have in recent years systematically improved our compliance, risk and control capabilities and processes and sought to foster a management culture under which potential issues are raised and addressed. As a result, a number of legacy issues have been identified in which errors have or may have led to poor outcomes or losses for our customers – for instance the debt collection issue.

We are sorry for any detriment that these issues may have caused to our customers and for not addressing the errors sooner. We are committed to rectifying them and ensuring that any customer of Danske Bank who has suffered a loss due to our errors receives compensation.

A central remediation unit

To ensure these legacy issues are handled consistently, timely and proactively, we established a remediation unit in October 2020. The focus of the unit is to handle legacy issues, which are characterized by having a certain degree of complexity, span over a longer time period and may have led to customer losses.

The purpose of the new unit is also to ensure that our learnings from the issues are collected and applied in the future, and that we communicate transparently and timely to customers and relevant stakeholders.

This site is dedicated to provide updates on the remediation process for the legacy issues that are overseen by our remediation unit – not daily operational issues and errors. The site will be updated on a regular basis.

Our approach to remediating legacy issues

Understand the scope and detriment to customers

Ensure timely communication with customers and inform relevant authorities

Correct any errors as fast as possible and prevent reoccurrence

Compensate customers for losses due to our errors 

Details about legacy issues

The list below only entails legacy issues that have a certain degree of complexity, span over a longer time period and have or may have led to customer losses. 

The remediation of the legacy issues is at different stages. In some cases, the causes and impact are still being investigated, while in others, we have already started compensating affected customers. 
  • Debt collection

    In 2004, we introduced a new IT system to process debt collection cases. This resulted in some data errors that unfortunately caused us in some cases to collect debt that was time-barred (out of date) or to collect a larger amount than the customers owed us. 108,000 customer cases are at risk of overcollection in Denmark.

    In May 2019, a comprehensive investigation was launched and the relevant authorities were notified. Since then, we have been working to understand the causes of the errors and to ensure that we rectify these. We have also been working to ensure that customers who have paid too much receive repayment of their money as well as compensation for the period during which they should have had the money at their disposal.

    Read more

  • Voluntary deficit sales agreements via home

    At Danske Bank there has been a practice of negotiating property sale fees with all real estate agents in Denmark except for the Danske Bank Group’s own real estate agency chain ‘home’. Customers agreed to these fees in connection with the repayment of their debt. This practice, which existed from 2013 to 2019, may have resulted in up to 2,000 customers paying too high agency fees to home.

    Today, we have procedures that ensure that we treat all real estate agents equally, including home.

    Read more

  • Interest on dunning fees

    During the analysis of the debt collection issue, we identified and communicated the potentially wrongful charging of interest on dunning fees following a legislative change in 2005.

    In Denmark, the issue potentially concerns about 400,000 customers. We currently expect the wrongfully charged interest to amount to less than DKK 50 for half the customers. We will inform potentially affected customers as quickly as possible.

    We have identified a similar issue in Norway, where we have also stopped charging this type of interest and are investigating the scope. The amounts are also expected to be small.

    Further information will be updated

  • Flawed estimates for profit and loss figures

    While our customers have always seen the correct share price and received the correct amounts if they have traded shares, up to 27,000 personal and business customers across the Nordic countries and Luxembourg may have seen flawed estimates for profit and loss in Danske eBanking or Mobile Banking for example, due to shortcomings in an underlying IT system.

    This concerns a limited number of shares that have been available on our trading platforms during the past 10 years.

    Furthermore, around 60 Swedish customers have experienced wrong reporting of tax for a number of shares. We corrected our reporting to the Swedish Tax Agency and stopped displaying profit and loss figures for the potentially affected shares, until we had investigated them further.

    Read more

  • Discrepancy between investment agreement and profile 

    We have identified across the Nordic region, primarily in Denmark, that a number of investment agreements were registered incorrectly, resulting in discrepancies between the customers’ investment agreements and investment profiles. It affects around 600 customers and in some cases, the error dates back to 2007. It may have resulted in customers having achieved a lower or higher return than they would have achieved if the agreement had been registered correctly.

    We are strengthening our controls and updating our processes for how investment agreements are registered to prevent similar errors from occurring again.

    Read more

  • Rebates on foreign exchange trades and international payments

    Across our markets, up to 3,000 customers, primarily businesses, have potentially not received the agreed rebates on foreign exchange trades and foreign exchange in connection with international payments because the rebates were not registered correctly in our system. Our initial investigation show that for some customers the issue dates back to 2009.

    We have tightened our procedures and are implementing an updated IT infrastructure to make sure that this type of error cannot occur again.

    Read more

  • Delays in our tax services

    Processes related to two of the tax services offered to some of our custody account customers have unfortunately been insufficient. 

    One issue relates to delays in paying dividend tax repayments on some US securities to customers in the period from 2015 to 2019. It affects around 2,200 of our customers across the Nordic countries and Luxembourg, the vast majority in Denmark.

    The second issue relates to delays in our tax reclaim service, affecting up to 3,300 of our customers, mainly customers holding a custody account in Denmark.

    We have updated our processes to prevent such issues from reoccurring and set up a task force to address the backlog of outstanding reclaims.

    Read more

  • Infinite loan terms

    For less than 100 customers, the term of their loan have unfortunately become infinite, due to a lack of controls, which we failed to inform them about. In addition, we failed to follow up to ensure that customers had an appropriate repayment profile. The loan term had become infinite because payments did not cover interest accrued after interest rate increase in a period between 2007 and 2012.

    Adjustments were made to ensure none of the affected loans have infinite terms and system changes are implemented, so that if the interest rate changes, we are able to prevent the loan term from extending beyond a certain limit.

    Read more

  • Fees for business customers

    Danske Bank has identified that approximately 2,300 business customers, which for a period of time may have paid a credit renewal fee, which we had no basis for charging. This was due to a system error in 2015, when we automated a fee system for business customers. We are currently identifying affected customers and began contacting them at the end of January. All affected customers will of course be compensated.

    Further information will be updated 

Updates on legacy issues

Below are our monthly updates on how we are progressing with remediating our legacy issues. If you wish to receive a link to the updates by email, sign up.

  • 01. feb 2021Remediation Update 1 Feb 2021