HSBC computer crash delays paychecks for up to 8,000 Catholic Health System workers
Some UB employees also encountered problems
Thousands of Western New Yorkers did not get paid on time Thursday, as HSBC Bank USA struggled to process and post payroll five days after a key computer crashed.
As many as 8,000 employees of Catholic Health System and an unknown number of University at Buffalo employees were unable to get paid by direct deposit Thursday morning.
The situation was cleared up hours later for the UB workers — still more than a day late — and an interim solution was developed for Catholic Health in late afternoon. But the Catholic Health deposits still might not be posted to individual accounts until at least today.
The difficulties demonstrate the degree to which HSBC is still struggling after a computer disk failure Sunday interrupted services and caused it to fall behind on keeping customer accounts up to date.
Most of the bank’s systems that were affected are back up now. Bank officials have been working aggressively during the last few days to restore the accounts and regain customer confidence. But because of the sheer volume of transactions and accounts, officials can’t say when the job will be done.
In an e-mailed statement, HSBC officials admitted the bank “has experienced delays in processing certain customer transactions, including payroll payments on behalf of some of our commercial customers.” The bank said it would make special accommodations to help customers.
“We would again like to thank our customers and any other individuals impacted for their patience and understanding in working through this difficult issue with us,” the bank said.
HSBC handles the entire payroll for Catholic Health, the area’s second-largest hospital system, whose normal payday is Thursday. HSBC had received Catholic Health’s payroll in its computer system, but as of Thursday, the money wasn’t yet available for individual employees in their bank accounts, said spokesman Dennis McCarthy.
“Payroll is one of those critical responsibilities any employer has,” McCarthy said early Thursday. “Payday is payday, and people need to expect they’re going to get their paycheck. It impacts people’s lives.”
McCarthy said he wasn’t sure yet how many of the system’s 8,000 workers use direct deposit.
“It’s a situation that we’re not at all happy with as an organization,” he said. “It’s not acceptable for them to be able to just say, ‘Oops, the money is there, but it’s not available.’ ”
Bank and Catholic Health officials maintained that the deposits should have started to clear by late Thursday. The bank hopes to have all payroll deposits for HSBC customers processed by today, according to a Catholic Health memo to employees. The hospital system is “still awaiting word regarding non-HSBC banks.”
Under an interim solution announced Thursday, Catholic Health employees can take their direct-deposit paystubs to any HSBC branch and HSBC will pay them what they are owed. If they are not also HSBC customers, the employees will have to write a personal check to HSBC for the amount they receive.
HSBC also extended the hours at eight branches until 8 p. m. Thursday to make them accessible for Catholic Health workers.
Meanwhile, HSBC pledged to Catholic Health that it will ensure no one is charged an overdraft fee if an account doesn’t have sufficient funds to cover automatic debits because the deposit hasn’t yet posted.
“We see this as a very serious concern on behalf of our associates,” said Michael J. Moley, Catholic Health’s senior vice president of human resources. “I know HSBC recognized that this is serious, and we are doing all we can do to get this resolved on behalf of our associates as soon as possible.”
HSBC said it will help customers who are unable to pay other bills or incur fees from other companies as a result.
“HSBC has assured us that they will work with other banking institutions and vendors to resolve any problems that may arise from accounts having insufficient funds due to this processing problem,” said the memo from Moley and Chief Financial Officer James Dunlop.
UB employees with direct deposit to HSBC accounts also experienced a delay in getting their money, even though it was sent to HSBC by the state comptroller’s office last Friday for routine posting Wednesday. HSBC is not UB’s bank.
UB officials couldn’t reach the bank early Thursday morning after fielding questions from employees, but “everything was rectified” on its own before noon, said Karen Bauer, state payroll supervisor for State Human Resource Services at UB.
The crisis started Sunday, when HSBC’s core banking computer system suddenly went down for reasons that the bank says it doesn’t fully understand. The core system, a standard feature at all banks, keeps track of account balances and transactions, and is used by ATMs and online banking to determine if customers have enough money for withdrawals.
That left customers unable to access accounts online and unable to withdraw or cash checks for more than $500 early this week. Some complained in e-mails and blogs that they couldn’t use their debit cards for a period of time.
Customers say they’re sympathetic and understand the bank is working hard, but many are worried they won’t have money to pay bills.
Some, like 51-year-old Cynthia Dickinson of Richmond, Va., complain of money in limbo — transferred out from one account but not yet recorded as deposited into another.
Denice Szafran even cited disappearing money. The 52- year-old graduate anthropology student at UB received her semi-annual financial aid deposit Saturday morning and used it to buy gas, clothes and books. By Tuesday afternoon though, her deposit had disappeared, but the payments were still there — along with $140 in fees.
She finally got most of the deposit back — minus fees — and took almost all of that to a bank across the street. She still wants the fees. “I want my money now,” she said. “I don’t want to take a chance that it’s going to disappear again and never come back.”
