[ISN] Bank glitch leaves 10 million Canadians without paycheque

[InfoSec News]

Forwarded from: Mark Bernard <mbernard at nbnet.nb.ca>

Dear Associates,

A rather sigificant lack of information security practices and
procedures has created a rather large problem where 1/3 of Canadians
haven't been paid!

http://www.canadaeast.com/apps/pbcs.dll/article?AID=/20040604/TTEBRIEF/306040085/-1/FRONTPAGE

June 4, 2004
Times & Transcript Staff

Computer problems plaguing the Royal Bank of Canada has caused payroll 
paralysis across the country, affecting more than 10 million people 
nationwide with the end for some unpaid clients not expected until the 
weekend.

More than 10,000 provincial government employees, including Premier 
Bernard Lord, were not paid yesterday leaving $11.4 million in the 
government's bank account until the massive computer failure is fixed. 
The payroll problem didn't end with the government; more than 3,000 NB 
Power employees were impacted as well as 125 City of Moncton workers 
who were left without a pay cheque.

Finance Minister Jeannot Volpé said the province is helpless in the 
matter.

"It is not something that we can fix ourselves," Volpé said.

"It is very unfortunate for all the employees that were impacted but 
there is nothing that we can do about it."

By the end of business hours yesterday, Volpé said employees who use 
the Royal Bank, Bank of Montreal, CIBC and Toronto Dominion-Canada 
Trust should be paid but

those using the Scotiabank, credit unions and other financial 
institutions would have to wait until today.

The finance minister also noted that some of the province's direct 
deposit payments to vendors and to people receiving family support 
orders have been affected.

Government workers were not complaining about the computer problems 
yesterday as they were leaving for their lunch break.

"Honestly it doesn't really affect my life today, no," said Micheline 
LeBlanc.

"It is something that happens and we are used to computer glitches in 
the computer system."

Jim Knight, a government worker, said he knows he's going to get paid 
eventually and he feels worse for the bank's computer technicians.

"We've all been there and I hope it turns out well for them," Knight 
said.

The Royal Bank issued a statement late yesterday indicating all 
transactions made as of Tuesday have been updated and all money 
movement made as of Wednesday is expected to be reflected in client 
balances today. But transactions made yesterday are not anticipated to 
be processed until the weekend.

In situations where customers had been expecting to be paid and have 
necessary purchases, such as groceries, scheduled for the weekend, the 
Royal Bank is recommending they visit their local branch immediately.

"The branch will work with them and see if they can accommodate the 
client," said Lori Smith, a Halifax-based spokeswoman for the bank.

Bank branches were kept open later yesterday and Smith said, if there 
is a need in various communities today, business hours will be 
extended again.

As for individuals who have automatic withdrawals scheduled with other 
financial institutions, Smith said customers should not worry about 
late fees, overdraft charges or damaged credit ratings.

"All of the other financial institutions know and understand what is 
happening and we've asked for their co-operation in getting through 
this time," she said.

The bank has said the processing disruption was created during a 
routine programming update to one of the institution's computer 
systems. Despite the problems, bank officials are underscoring to 
their clients that their money is safe and secure.

The banking problems caught many employers off guard yesterday.

A City of Moncton spokeswoman could not estimate how much money was 
not transferred to employees but confirmed the city's finance 
department is keeping in touch with the Royal Bank to overcome the 
problems.

The province's power corporation has been particularly impacted by the 
computer problems as nearly $5 million has not been handed out to 
employees.

"While in the past we've had problems with individual banks, we've 
been able to rectify them on the same day," said Jeffrey Carleton, a 
NB Power spokesman.

"This is the first time in well over two decades that we've ever had 
such a widespread problem in paying employees on the day that they are 
supposed to be paid."

NB Power's problems don't stop with the payroll department; large wire 
transfers to vendors, which can range from $15,000 to well over $1 
million, were delayed in recent days. The NB Power spokesman said, as 
of late yesterday, all the wire transfers to vendors, such as fuel 
suppliers or financial institutions, had been carried out and the 
banking backlog did not impact smaller vendors.

The power company has also been forced to make changes to its direct 
deposit system for customers. Carleton said NB Power will not withdraw 
funds from accounts that cannot pay because of the computer glitch and 
will catch back up in the next several days.

Stephane Robichaud, the director of provincial affairs for the 
Canadian Federation of Independent Business, said he hasn't yet 
received any complaints from the small businesses he represents in New 
Brunswick.



Mark E. S. Bernard, CISM, PM, PA,
e-mail: mbernard at nbnet.nb.ca
Phone: (506) 375-6368

Leadership Quotes: "People cannot be managed. Inventories can be
managed, but people must be led," H. Ross Perot