Danske Bank has submitted its response to the Danish Financial Supervisory Authority’s (DFSA) request for further information about the bank’s handling of the errors found in our debt collection system, which we have been working on since May 2019. The response, which can be read in full here, includes a description of the root causes of the identified errors, the historical knowledge of the data errors, the bank's handling of these errors and the extent of the problems.
“We deeply regret the situation and the uncertainty our mistakes and the data flaws in our debt collection system have caused for our customers, employees and other stakeholders. Unfortunately, we cannot change the mistakes of the past, which were not properly handled previously. But we can – and that is what we are doing – make sure we investigate the issues thoroughly, correct the mistakes and fully compensate our customers,” says CEO of Danske Bank Chris Vogelzang.
Further, the response outlines the following:
- Danske Bank deeply regrets the situation and the uncertainty our mistakes and the data flaws in the bank’s debt collection system have caused. We are fully committed to reviewing and remediating all cases impacted by the data flaws as soon as possible and to ensuring that the affected customers are fully compensated for any over-collection or other related loss they might have suffered as a result of our mistakes.
- There has been knowledge about at least parts of the problem in different parts and levels of the organisation, including leaders, during the years. Despite attempts to manage the problems, the underlying data flaws were never fully addressed, and unfortunately this has caused the issues to continue for several years.
- Since the members of the executive management were informed of the systemic data flaws in the bank’s collection systems in May 2019, we have initiated a wide range of remediation measures and conducted an extensive analysis of the underlying root causes of the issues.
- We have identified four root causes of the systemic data flaws: Collapsed principal, interest and fees, incorrect debt origination date, alike treatment of guarantors and co-debtors, and co-debtors charged the full principal. In total, 106,000 customers may be at risk of over-collection due to these errors. Danske Bank is committed to reviewing all these cases by July 2021, and we estimate that 10,000-15,000 customers are entitled to compensation.
- In connection with the analysis of the root causes, Danske Bank has identified a number of additional potential issues, which we are investigating to fully understand and address accordingly. Some of the issues identified are interest on dunning fees, erroneous data for court cases, agency fees and inaccurately reporting of customer tax information. As detailed in the response, these issues and any other issues that may be identified could potentially affect an additional number of customers than those impacted by the four root causes as detailed in the response. If customers have incurred any loss due to errors on our part in relation to these issues, they will be compensated.
Should the bank identify anything in its ongoing analysis that would change the information provided in this response, it will of course without delay revert to the DFSA to clarify.