July 28, 2006 4:11 PM PDT

Glitch continues to plague Washington Mutual

An attempt by Washington Mutual to upgrade the bank's Web site has turned into a technology and public-relations nightmare.

Last Saturday, an undisclosed number of customers of the financial-services company found that they couldn't perform several critical online banking chores such as electronically paying bills. Many waited, believing that the problem would be corrected sooner rather than later. They were mistaken.

Six days later the bill-pay feature at Washington Mutual is still inoperative. Moreover, the bank isn't offering an estimate on when the glitch will be repaired. The situation appears to be one of the longest-lasting Web site glitches that a bank has suffered.

"I have been trying to pay my (past due) cable bill since Sunday morning," Peter Boswell, a Washington Mutual customer, said in an e-mail. "Must find my checkbook."

Internet banking is saving banks billions of dollars. Consumers who bank online can review account balances, apply for loans and transfer funds without the help of expensive human tellers or loan officers. The trick to getting consumers comfortable with online banking has been proving that it's safe and reliable. Bank executives fear glitches because they know that they can undermine consumer confidence.

CNET News.com reported on Tuesday that Washington Mutual and Emigrant Direct, a bank that operates mostly in the New York metropolitan area, had both suffered mishaps as they attempted to add features to their sites last weekend.

Emigrant Direct was totally inaccessible for long stretches over a two-day period, but has apparently patched its problems. Washington Mutual on Wednesday fixed most of the malfunctions that hampered its customers' ability to transfer money or call up transaction histories. Nonetheless, one of the most popular banking tasks to do online is pay bills.

"We're in the process of adding some new features to WaMu.com," Gary Kishner, a Washington Mutual spokesman, said in an e-mail. "Unfortunately, the work that we're doing is taking longer than expected and is causing some online features to be periodically unavailable. Most of the site is operating just fine, but we're not quite done yet."

While the technicians continue to try to find an answer, bank representatives will complete bill payments for customers over the phone. Some customers who have tried this, however, have complained of long delays before a service representative is able to help them.

According to numerous e-mails received by CNET News.com, some customers were especially angered by the bank's failure to provide information. No note regarding the glitches was posted on the site until Friday, according to those customers. In contrast, a message acknowledging the interrupted service at Emigrant Direct was placed on the site's front door on Tuesday.

"Last night my husband called again and was told they had no idea as to when the problem would be solved," Eileen Garner said in an e-mail. "The tech did admit that it wasn't routine maintenance though--finally."

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