Glitch hits Wells Fargo service

Sam Zuckerman

Friday, April 30, 1999 | 11:35 a.m.

Wells Fargo Bank said its fast-growing online bill payment service has repeatedly crashed since Monday in a systems breakdown that is similar to the woes that recently have plagued the electronic brokerage industry.

San Francisco's Wells Fargo, the nation's largest online bank, is the name of the bank created after the merger of Norwest and Wells Fargo banks.

Wells Fargo said Thursday that as many as 150,000 customers who use Intuit's Quicken or Microsoft's Money software to pay bills from their bank accounts haven't been able to get through. The bank said it did not know when it could restore service.

The rest of Wells Fargo's 860,000 online customers pay bills directly through the bank's Internet site and haven't been affected.

The bank blamed the breakdown on a software glitch at CheckFree, the Georgia company that processes bill payments made through Quicken and Money.

CheckFree described the breakdown as "intermittent" and said it affected customers of as many as 21 banks nationwide that use Genesis, the company's most-advanced transaction processing system.

The company traced the problem to a software bug that created a bottleneck at the point that consumers enter Genesis from Quicken or Money, spokeswoman Laurinda Wilson said.

The company is testing new software code to fix the problem but it doesn't know when the system will be operating again, Wilson said.

"We've gotten our customers to rely on the availability of these systems," said Catherine Graeber, Wells Fargo's marketing manager for online financial services. "This isn't acceptable to us."

The bank said it is waiving April Internet banking fees, which are as high as $8 a month, for Quicken and Money bill-payment customers.

Leading online brokerages, including Charles Schwab and E-Trade, have suffered repeated failures of their electronic stock trading systems as surges in demand have swamped their computer capacity.

By contrast, online banking has grown at at a slower, more manageable pace, and service breakdowns have been less common. Bank customers go online to monitor their accounts, pay bills, transfer funds and apply for loans.

Quicken and Money customers click on a button in their money management software that automatically connects with CheckFree computers to pay bills from their accounts at any of more than a dozen banks nationwide.

Since Monday, Quicken customers who bank at Wells Fargo said they repeatedly got messages saying Intuit was unable to complete the connection.

"I have a hard time understanding how a computer network could be down for so long," said David Schnapf, a San Francisco attorney.

Schnapf said Wells Fargo representatives couldn't explain the breakdown or estimate when service would be restored. "I'm frustrated by the lack of information," he complained.

Analysts said the episode shows how banks and other companies that deal directly with customers are vulnerable to errors made by third-party vendors, such as CheckFree.

"The problems are out of the bank's control," said Chris Musto, an Internet banking analyst at Gomez Advisors in Massachusetts. "But to the customer, whether or not the bank outsources is irrelevant."