Dmitry Nikolaev - stock.adobe.co
Months after a High Court judge tore into the Post Office’s approach to branch computer system errors, the organisation is not sharing details of possible errors with subpostmasters, who are also still having difficulty contacting the branch support helpline.
A recent system error at the branch of a subpostmaster highlighted some of the challenges the Post Office faces to regain the trust of the people who run its branches, trust that was lost after almost two decades of denial.
The recent problem, which saw a customer’s withdrawal transaction declined even though the system had debited his account, appears to be an error known to the Post Office, but which has not been communicated to subpostmasters.
A High Court case that concluded late last year ruled that subpostmasters were right in their claims that errors in the Horizon system could cause unexplained branch losses. The trials also saw the Post Office criticised for not providing a fit-for-purpose branch support telephone helpline and not sharing known Horizon errors with the subpostmasters who could be affected.
In 2009, a Computer Weekly investigation revealed that subpostmasters, who run Post Office branches, were being blamed for unexplained financial losses, which they claimed were caused by errors made by the Horizon retail and accounting system. The Post Office denied this, and subpostmasters were prosecuted for theft and false accounting, with prison sentences, community service, criminal records and heavy fines among the injustices they suffered as a result (see timeline below).
Hundreds of subpostmasters took the Post Office to court in 2018 through a group litigation action to prove that the computer system was to blame for unexplained losses. They won the multimillion-pound High Court battle, which concluded in December 2019.
But now, nine months after the court settlement, in which the Post Office agreed to pay £58m in damages and promised to change its ways, subpostmasters are still in the dark about errors in Horizon. Meanwhile, the National Business Support Line, referred to by subpostmasters as the branch helpline or “hell line”, is still leaving subpostmasters with urgent requests for help, on hold for long periods.
Subpostmaster Mark Baker, who was described by High Court judge Peter Fraser as “redoubtable” during the trial, is branch secretary of the Communication Workers Union. He has been supporting subpostmasters who experienced problems with Horizon for many years.
During that time, while Baker has had experience of dealing with problems at other branches he has helped, he had not experienced a major Horizon error that could cause a loss or gain at his branch in the 20 years since Horizon was introduced – until now.
In Baker’s branch last week, he experienced an error that caused a shortfall, in this case for the customer. The error occurred when a customer tried to withdraw money from a building society account via the Post Office. Post Office branches offer banking services for banks and other finance firms in rural areas where there are no bank branches.
When the customer tried to withdraw the money, the in-branch Horizon screen reported the transaction as declined, but the customer’s bank balance was debited by the amount. “We have been aware of these for some time, through other subpostmasters, and examples are becoming more frequent,” said Baker.
He described the incident as a failure of what is known as the “three-handed handshake” in which the transaction has to be agreed by Horizon, the Link inter-bank payment system and in-branch.
“If one of those strands of communication fails, one of the parties is going to be out of pocket,” said Baker.
In the incident, a regular customer visited Baker’s branch to withdraw £400, but when they tried to process it, the screen said the transaction was declined.
The customer confirmed he had enough money in his account, so they tried again, but this time split the amounts. A transaction for £300 was declined and the receipt showed this was because the customer had exceeded his daily limit, although the previous transaction had been declined and nothing had been withdrawn that day.
“We tried for a third time, without success,” said Baker.
The customer told Baker he would visit a Nationwide Building Society branch to try to sort out why he could not withdraw the cash.
Baker added: “We tried ringing the Post Office twice, no answer after 20 minutes, so we gave up. We can’t keep trying and will wait for any errors that come back.”
The customer returned later that day and told Baker that Nationwide had confirmed that the Post Office had taken the £400. “He said ‘don’t worry, they gave me the money and said they would get it back from the Post Office’,” said Baker.
“When I went through all the papers when I closed, as I can’t do it during work hours, sure enough, the payment had gone through. I took the money out and put it with the paperwork because now I was over. But the Horizon screen was showing nothing.”
Baker added: “The cash is in the safe, with all the paperwork, waiting for Nationwide to do whatever they do through the Post Office if that ever happens. If the customer hadn’t have gone down to Nationwide and we hadn’t checked his statements, he would have been £400 light and would never have known why.”
The Post Office’s banking team contacted Baker eight days later. “They only contacted me because the building society had been on to them,” he said.
Baker said he was impressed with the specialist banking team contacting him, but pointed out that this raises questions. “It shows the Post Office is fully aware that this happens because they have a department set up to deal with it, but subpostmasters are not being kept up to date,” he said. “Most don’t know what one-sided transactions are.”
Asked by Computer Weekly why it does not alert the branch network to all potential errors, the Post Office told Computer Weekly: “We are working with postmasters on further improvements throughout the business and this includes operational and other communications.”
Former subpostmaster Tim McCormack, who has campaigned for the Post Office to release details of all known Horizon errors for many years, said: “What seemed to be genuine interest from the Post Office [nine months ago] has mutated into a lengthy delay, which gives rise to suspicions that there are errors they don’t want the network to know about.”
Baker received an error notice 10 days later which said: “A card banking transaction for [account] on [date] for £400. Withdrawal was processed but no funds were given, creating a cash gain in the branch.” The error notice was instigated by the Post Office banking team.
The error in Baker’s branch looks like a manifestation of something that forensic accounting firm Second Sight identified as early as 2013 after examining a sample of cases on behalf of the Post Office.
This is known as a one-sided transaction and it often happens the other way round, with the customer being given the money but the Horizon system not recording it, leaving subpostmasters down in their accounts.
When two systems are running together, in this case Horizon and the inter-bank payment system known as Link, four things can happen – both work, neither works, and the two options where one works and the other doesn’t.
These errors can be caused by telecommunications and hardware problems.
For subpostmasters, it is a huge problem when they give the money to the customer but Horizon does not record it, leaving them down by that amount. The customer is less likely to report an error that gives them money without deducting it from their account than when they have money deducted without receiving it.
Early in its investigations, Second Sight, which was commissioned by the Post Office to investigate accusations against Horizon, identified one-sided transactions and the potential for them to lead to unexplained shortfalls.
Ron Warmington, head of Second Sight, said: “Customers who get nothing for something are more likely to notice and do something about it than those who get something for nothing.”
Warmington said he strongly suspected that a substantial proportion of the historical shortfalls would be attributable to this type of error.
Challenged by subpostmasters and Computer Weekly over the past decade, the Post Office always maintained that there were no errors in Horizon. But during the High Court trial, evidence in court revealed that the Post Office and Horizon supplier Fujitsu had a known errors log, which documented thousands of known Horizon errors. But these were never shared with subpostmasters and it took a court case to reveal their existence.
Responding to Computer Weekly’s questions about changes it had made since the court judgments, the Post Office said a programme of reform was under way: “We are overhauling culture, practices and procedures throughout the organisation, forging an open and transparent relationship with postmasters.”
It said it was in consultation to “hear directly from subpostmasters about how they want to be involved in the development and execution of business decisions”.
As regards the branch helpline, the Post Office said it had “restructured NBSC (now the Branch Support Centre) to enable issues to be resolved more quickly and efficiently. In the majority of cases, our Branch Support Centre can resolve queries quickly and easily to the postmaster’s satisfaction”.
For more complex cases, the Post Office said it assigns a specific case handler to complete a more in-depth investigation. “The case handler will work alongside the postmaster and, if necessary, the case can be further escalated,” it said.
It added that design changes had been made to various transactions on Horizon, based on postmaster feedback.
As banks continue to close branches, particularly in rural areas, the Post Office is vital in offering services on their behalf. As closures accelerate as a result of cost cutting and the move to digital banking services, Post Office branches are likely to experience higher volumes of customers using them to make banking transactions.
Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009
- May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
- September 2009: Postmasters form action group after accounts shortfall.
- November 2009: Post Office theft case deferred over IT questions.
- February 2011: Post Office faces legal action over alleged accounting system failures.
- October 2011: 85 subpostmasters seek legal support in claims against Post Office computer system.
- June 2012: Post Office launches external review of system at centre of legal disputes.
- January 2013: Post Office admits Horizon system needs more investigation.
- January 2013: Post Office announces amnesty for Horizon evidence.
- January 2013: Post Office wants to get to bottom of IT system allegations.
- June 2013: Investigation into Post Office accounting system to drill down on strongest cases.
- July 2013: Post Office Horizon system investigation reveals concerns.
- October 2013: End in sight for subpostmaster claims against Post Office’s Horizon accounting system.
- October 2013: Former Lord Justice of Appeal Hooper joins Post Office Horizon investigation.
- November 2013: 150 subpostmasters file claims over “faulty” Horizon accounting system.
- September 2014: Fresh questions raised over Post Office IT system’s role in fraud cases.
- December 2014: MPs blast Post Office over IT system investigation and remove backing.
- December 2014: Why MPs lost faith in the Post Office’s IT investigation, but vowed to fight on.
- December 2014: MPs to debate subpostmaster IT injustice claims.
- December 2014: MP accuses Post Office of acting “duplicitously” in IT investigation.
- January 2015: MPs force inquiry into Post Office subpostmaster mediation scheme.
- January 2015: Post Office faces grilling by MPs over Horizon accounting system.
- February 2015: Post Office CIO will talk to any subpostmaster about IT problems, promises CEO.
- March 2015: Post Office ends working group for IT system investigation day before potentially damaging report.
- March 2015: MPs seek reassurance over Post Office mediation scheme.
- March 2015: Retiring MP aims to uncover truth of alleged Post Office computer system problems.
- April 2015: Post Office failed to investigate account shortfalls before legal action, report claims.
- April 2015: Criminal Courts Review Commission set to review subpostmasters’ claims of wrongful prosecution.
- May 2015: IT system related to subpostmaster prosecutions under review by CCRC.
- June 2015: Post Office looking to replace controversial Horizon system with IBM, says MP.
- July 2015: Campaigners call for independent inquiry into Post Office Horizon IT system dispute.
- October 2015: James Arbuthnot takes Post Office IT fight to House of Lords.
- November 2015: The union that represents Post Office subpostmasters has warned of a problem with the Horizon accounting system.
- November 2015: An email from Post Office IT support reveals a problem with the Horizon system and supporting processes that could lead to accounting errors.
- November 2015: Group litigation against Post Office being prepared in Horizon dispute.
- February 2016: Post Office faces group litigation over Horizon IT as subpostmasters fund class action.
- June 2016: Post Office chairman Tim Parker says there would be “considerable risk” associated with changing its Horizon computer system.
- November 2016: The legal team hired by a group of subpostmasters will take their case to the next stage.
- January 2017: The group action against the Post Office that alleges subpostmasters have been wrongly punished for accounting errors gets a green light from the High Court of Justice.
- March 2017: 1,000 subpostmasters apply to join IT-related group litigation against Post Office.
- April 2017: Investigation into claims of miscarriages of justice in relation to a Post Office accounting system has appointed a forensic accountant firm.
- May 2017: Hundreds of subpostmasters have applied to join IT-related legal action since March.
- July 2017: Post Office defence in computer system legal case due this week.
- August 2017: Campaigners submit initial evidence in group litigation against Post Office over controversial Horizon IT system.
- October 2017: Subpostmasters’ group action against the Post Office reaches an important milestone.
- November 2017: An end is in sight for subpostmasters’ campaign against alleged wrongful prosecution, which they blame on a faulty computer system.
- November 2017: The High Court judge managing the subpostmasters versus Post Office legal case over an allegedly faulty computer system tells legal teams to cooperate.
- January 2018: Forensic investigation into Post Office IT system at centre of legal case nears completion.
- April 2018: Criminal Cases Review Commission forensic examination of the IT system at the centre of a legal case against the Post Office has raised further questions.
- May 2018: Post Office branches unable to connect to Horizon computer system for several hours after morning opening time.
- October 2018: After over a decade of controversy, next week marks the beginning of a court battle between subpostmasters and the Post Office.
- November 2018: Case against Post Office in relation to allegedly faulty computer system begins in High Court.
- November 2018: High Court case in which subpostmasters are suing the Post Office has revealed a known problem with a computer system at the core of the dispute.
- November 2018: A High Court trial, where subpostmasters are suing the Post Office for damages caused by an allegedly faulty IT system, ends second week.
- November 2018: Post Office director admits to Horizon errors and not sharing details with subpostmaster network.
- November 2018: The High Court trial in which subpostmasters are suing the Post Office has reached an important stage.
- December 2018: CCRC may hold off subpostmaster decision until after Post Office Horizon trial.
- December 2018: Court case where subpostmasters are suing the Post Office set to span at least four trials and extend into 2020.
- January 2019: Subpostmasters’ campaign group attacks Post Office CEO Paula Vennells’ New Year honour amid ongoing court case.
- January 2019: Thousands of known errors on controversial Post Office computer system to be revealed.
- March 2019: Tech under spotlight at High Court in second subpostmasters versus Post Office trial.
- March 2019: Post Office considered Horizon IT system “high-risk”, court told.
- March 2019: CCRC watching Post Office Horizon trial closely.
- March 2019: Judge rules that Post Office showed “oppressive behaviour” in response to claimants accused of accounting errors they blamed on Horizon IT system.
- March 2019: Post Office “lacked humanity” in the treatment of subpostmasters, says peer.
- March 2019: A High Court judge heard that the Post Office did not investigate a computer system error that could cause losses, despite being offered evidence.
- March 2019: The Post Office legal team in the case brought by more than 500 subpostmasters has called for the judge to be recused after questioning his impartiality.
- March 2019: A senior civil servant asked the Post Office to repay public money it had wrongly allocated to paying legal costs.
- April 2019: Subpostmaster claimants’ legal team makes application for the Post Office to pay millions of pounds of costs associated with trial.
- April 2019: Post Office to appeal judgment from first Horizon trial.
- April 2019: The Post Office’s claim that the judge overseeing the case concerning its controversial Horizon IT system was biased has been dismissed – but will now be considered by the Court of Appeal.
- April 2019: MP questions government over Post Office Horizon case.
- April 2019: Government says no conflict of interest in trial despite Post Office chairman’s dual role.
- May 2019: The Court of Appeal has refused the Post Office’s application to appeal a major decision in the Horizon IT trial.
- May 2019: The Post Office has applied for permission to appeal judgments from the first trial in its IT-related legal battle with subpostmasters.
- May 2019: The judge in the Post Office Horizon trial has ordered the organisation to pay the legal costs of its courtroom adversaries, and refused to give permission to appeal a major judgment.
- June 2019: Post Office asks Court of Appeal for permission to appeal judgment in first Horizon trial.
- July 2019: The Post Office has admitted that some subpostmasters are at risk of accounts not balancing due to an error it does not understand.
- July 2019: Problem revealed during High Court trial left subpostmaster with £18,000 surplus after IT system failed to register full amount of cash scanned in.
- August 2019: Subpostmasters suffering slow running and frozen terminals while Post Office searches for a fix to issues apparently caused by a software update.
- August 2019: The Post Office has fixed the latest problems with its Horizon system, affecting hundreds of branches.
- October 2019: A High Court judgment for a trial that focused on the Post Office’s IT system at the centre of a multimillion-pound litigation will be announced early next month.
- November 2019: The Court of Appeal has rejected a Post Office application to appeal judgments made in its multimillion-pound battle with subpostmasters over IT system failures.
- November 2019: Peer calls for clear-out of Post Office board after Court of Appeal confirms major court defeat.
- December 2019: The Post Office has settled its long-running legal dispute with subpostmasters, and will pay £57.75m in damages.
- December 2019: Subpostmasters ended their legal battle with the Post Office at the optimal time, according to the lawyer that managed the High Court action.
- December 2019: Subpostmasters proved right on IT system failures as calls for full public inquiry mount.
- December 2019: Criminal Courts Review Commission to review Horizon judgment “swiftly”.
- December 2019: National Federation of Subpostmasters cries foul after court ruling on controversial computer system.
- December 2019: Former Post Office CEO apologises to subpostmasters over Horizon scandal.
- December 2019: Call for former Post Office CEO to step down from public roles after IT court battle lost.
- January 2020: Fujitsu must face scrutiny following Post Office Horizon trial judgment.
- January 2020: Subpostmaster group calls for government to pay legal costs for Horizon trial.
- January 2020: Why subpostmasters are calling on the government to pay Horizon trial costs.
- January 2020: Department for Business, Energy & Industrial Strategy says it did not make decisions in the Post Office’s recent court battle.
- January 2020: Government should not be allowed to dismiss subpostmasters’ claims over Horizon IT scandal.
- January 2020: Police sent information about potential Fujitsu staff perjury in subpostmaster prosecutions.
- January 2020: Prosecutions are a significant step closer to being sent to the Court of Appeal as Criminal Courts Review Commission forms a group of commissioners to review them.
- January 2020: Alan Bates: The “details man” the Post Office paid the price for ignoring.
- February 2020: The government has refused to pay the huge legal costs subpostmasters incurred in their battle with the government-owned Post Office, which they won.
- February 2020: Members of Parliament seeking a public inquiry into the Post Office Horizon scandal face huge challenges, but pressure and time could force justice.
- February 2020: Calls for inquiry into Post Office IT scandal increase in Parliament, with cross-party support.
- February 2020: Care Quality Commission to review concerns over Paula Vennells’ appointment after they were raised by a former NHS consultant psychiatrist.
- February 2020: Government admits it was too passive managing Post Office as parliamentary pressure builds.
- February 2020: Minister says Post Office IT experts misled the government when it asked questions about subpostmasters’ concerns over Horizon IT system.
- March 2020: Boris Johnson commits to “getting to the bottom of” Post Office Horizon IT scandal.
- March 2020: Boris Johnson’s commitment to inquiry into Post Office scandal in doubt.
- March 2020: MPs call on PM to commit to full public inquiry into Post Office Horizon IT scandal.
- March 2020: Those who did not play by the rules in Post Office Horizon scandal “should face prosecution”.
- March 2020: MPs told to hold to account those responsible for Post Office Horizon IT scandal.
- March 2020: The Post Office has sparked anger with secret settlements with subpostmasters outside the recent legal action against it.
- March 2020: Labour MP Karl Turner tells Computer Weekly that the Post Office Horizon scandal is the most grotesque version of predatory capitalism he has ever seen.
- March 2020: MP Kevan Jones has warned a government minister not to repeat the mistakes of predecessors in relation to the Post Office Horizon IT scandal.
- March 2020: Criminal Cases Review Commission to use Microsoft Teams to ensure review of subpostmaster prosecutions is held on time.
- March 2020: Post Office postpones subpostmaster compensation scheme amid Covid-19 crisis.
- March 2020: Meeting reviewing subpostmaster applications to appeal criminal prosecutions moves into second day.
- March 2020: Subpostmaster prosecutions to be considered by Court of Appeal for miscarriages of justice.
- March 2020: How subpostmasters made legal history with biggest referral of potential miscarriages of justice.
- April 2020: Met Police examines information about evidence given in court by Fujitsu staff on the Horizon IT system.
- May 2020: Subpostmasters who had their lives ruined by the Post Office’s faulty IT system have received their damages after a High Court victory.
- May 2020: A senior Post Office executive at the centre of an IT scandal, who tried to mislead a High Court judge in relation to it, has left the organisation without fanfare despite many years of service.
- May 2020: Post Office re-examines hundreds of prosecutions that could have resulted from faults in Horizon IT system.
- June 2020: A campaign group representing subpostmasters who were wrongly prosecuted for theft and false accounting by the Post Office is raising money to help clear the names of victims of the scandal.
- June 2020: Subpostmasters to force scrutiny of government’s role in Post Office IT scandal.
- June 2020: The Criminal Cases Review Commission sends 47 more subpostmaster cases to Court of Appeal and asks government to review private prosecution powers.
- June 2020: Select committee chair writes to former Post Office CEO demanding answers over her role in IT scandal.
- June 2020: The government has been accused of launching a review that fails in getting to the bottom of one of the biggest miscarriages of justice in UK history.
- June 2020: Subpostmasters will not cooperate with government review into IT scandal.
- June 2020: The government’s proposed review of the Post Office IT scandal has received a further setback as forensic accountants join subpostmasters in refusing to back it.
- June 2020: Call for government review of Post Office Horizon scandal to have the power to force individuals to give evidence under oath.
- June 2020: Subpostmasters seeking justice in the Post Office Horizon IT scandal are regaining momentum in Parliament.
- June 2020: Healthcare regulator will be discussing concerns about former NHS boss chairing an NHS trust at an upcoming meeting.
- June 2020: Second Sight is working with law firm in appeals by subpostmasters against criminal convictions in Horizon IT scandal.
- June 2020: Post Office and Fujitsu blame each other for many of the failings in the Horizon IT scandal that wrecked lives.
- June 2020: Parliamentary Justice Committee to hold short inquiry into the rules and regulations surrounding private organisations’ ability to initiate criminal proceedings.
- July 2020: Victims of the Post Office Horizon IT scandal need to raise thousands of pounds in a week or those responsible for their suffering will avoid scrutiny.
- July 2020: The government is set to face scrutiny over its involvement in the Post Office Horizon IT scandal, described as one of the biggest miscarriages of justice in modern UK history.
- September 2020: The government repeats that it won’t pay victims’ legal costs and confirms review into the scandal will not have the power to call witnesses.