TD Bank scrambles to fix computer problems

TD Bank N.A., formerly Commerce Bank, spent yesterday sorting out continuing computer-system problems that began over the weekend, leaving customers angry and confused.

Customers checking their balances worried that deposits were not being cleared, that checks would bounce, that transfers among accounts would not happen, and that they could not get up-to-date information about the status of their accounts.

"You would think a big business would have some sort of a fallback," said Irene McCool of Erdenheim, who expected to see her husband's pension check and paycheck in her account but did not. "It is unacceptable. I can see people wanting to pull out."

Bank officials said they had been working around the clock to fix the problem, which has to do with the time it takes transactions to post to accounts. They said they would compensate customers for any bounced check or late fees.

"I'm sympathetic to the banks," said former Commerce bank executive Gerry Cuddy, now chief executive officer of rival Beneficial Bank. "But this is critical. If you can't get access to your money, that's it. That's your business as a bank."

As of 2008, TD Bank was the region's second-largest bank, with 12.9 percent of the deposits, according to data from the Federal Deposit Insurance Corp.

TD Bank's problems started over the weekend, when its Canadian parent company, Toronto-Dominion Bank, merged the computer systems of two acquisitions: Banknorth in Maine and Commerce Bank in Cherry Hill.

Then the inevitable occurred.

"System conversions never go as planned," said John Kaurloto, a systems trainer and former software consultant who has participated in at least five system conversions.

"Honestly, there is always something you didn't count on, something you didn't expect," said Kaurloto, who works for a city law firm.

That is why he was irritated, but not surprised, when his account at the bank was disrupted. He did not see his paycheck in his account on Wednesday, nor did he see whether his automatic bill payments, scheduled for yesterday, were made.

He said that after two long waits on the telephone and a fruitless visit to a local branch, he got the bank to agree to forward money to his account so his bills would be paid.

Other customers reported similar frustration.

Here is what happened, according to TD spokeswoman Rebecca Acevedo:

Typically at any bank, customers deposit or withdraw money, write checks, or transfer funds online, in the bank, in stores, and at ATM machines during the day. All those transactions get reconciled overnight in a process known as "batch posting."

On weekends batch posting takes place just after midnight on Sunday and into early Monday morning.

Over the last weekend, after warning customers about the change, TD's computer people merged the two bank's systems. The trouble showed up with the first batch posting in the new system.

Instead of finishing early Monday morning, the process took well into the day, leaving customers confused. Each subsequent night's batch posting had problems, and it will not be clear until this morning whether the problem is fixed.

"We're just working 24/7 and that's our focus," Acevedo said yesterday.

With this mega-hassle, TD Bank joins the sad company of businesses that have suffered through major systems problems.

In March 2007, US Airways Group Inc. and America West Airlines Inc., which had merged, bollixed their self-service customer kiosks when they tried to combine their computer systems over one weekend.

In 2006, Cigna Corp. paid $93 million to settle a class-action lawsuit based on major problems that occurred when the Philadelphia health insurer switched to a new computer system in 2000.