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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. 
  • 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.

    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 now reviewed largely all of the 197,000 customer cases in our debt collection systems where there is a risk of overcollection as a result of the original data errors.

    We will naturally repay the amount overcollected to the affected customers, but we will also compensate customers for the period during which they should have had the money at their disposal. Moreover, the outstanding debt will be reduced in the vast majority of cases. During our investigation of the original data errors, we have unfortunately become aware of a number of potential additional issues that we are still investigating. 

    While we continue to investigate the case, the repayment of debt has been suspended for cases in which more than 60% of the debt in default has been repaid and the risk of overcollection is thus the highest. Moreover, no interest will accrue until each case has been resolved.

    Read more

  • Between 2013 and 2019, it was the practice at Danske Bank to negotiate estate agent fees with all estate agents in Denmark except for the Danske Bank Group’s own estate agency chain home. Customers agreed to the fees in connection with the repayment of their debt. This practice 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 estate agents equally, including home.

    Read more

  • In connection with the analysis of the debt collection issue, we have found that we have wrongfully collected interest on reminder fees. The error arose in connection with an amendment of the Danish Interest Act (Renteloven) to which our systems were not adapted.

    We are currently reviewing all reminder fees that we have charged in Denmark since 2005 – this concerns about 347,000 customers. In how many cases interest on reminder fees has been charged is still unclear. Customers who have paid interest on reminder fees will of course be reimbursed and will receive compensation for the time that the money should have been at their disposal.

    Read more

  • 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.

    In September 2021, a closing memo has been sent to the DFSA and we consider the case as closed.

    Read more

  • 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

  • Across our markets, some customers, primarily business customers, have not received the correct discounts on foreign exchange trades and foreign exchange in connection with international payments because the discounts were not registered correctly in our system in the period from 2009 to 2021.

    We will reimburse the excess amount paid by the customers affected. We have tightened our procedures and have implemented an updated IT infrastructure to minimise the risk of similar errors in future.

    Read more

  • During the spring of 2020, we identified insufficiencies in our processes related to two of the tax services offered to some of our custody account customers.

    Following the identification of these issues, we initiated a thorough review of the tax services to ensure that we uncovered other possible issues. In this review, we have identified a number of additional potential issues – seven of which involve potential customer detriment. The issues relate to potentially incorrect pay-outs to customers, including differences in dividend payments, potentially incorrect tax benefits applied, and potentially incorrect tax reclaims.

    Our current early estimate indicate that up to 6,000 customers may be affected by one or more of these additional issues. 

    We have stopped these issues and implemented short-term solutions to ensure that none of the significant issues will affect customers going forward. Our focus is now on getting the complete overview of impact on customers and ensure that all affected customers are compensated.

    Read more

  • 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

  • We have identified a number of business customers in Denmark who may have paid credit renewal fees which we did not have a basis for collecting. This was due to an issue in a system implemented in 2015, when we automated fee collection for business customers. We are examining a group of around 2,300 business customers who may be affected and began contacting them in January 2021. All affected customers will of course be compensated. We started paying compensation in April 2021.

    Read more

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.

  • 04. okt 2021Remediation Update 4th October 2021
  • 03. sep 2021Remediation update 3 September
  • 30. jun 2021Remediation Update 30 June 2021
  • 11. maj 2021Remediation Update 11 May 2021
  • 06. apr 2021Remediation Update 6 April 2021
  • 02. mar 2021Remediation Update 2 March 2021
  • 01. feb 2021Remediation Update 1 Feb 2021