An important aspect of customer-perceived quality is what are termed critical incidents, i.e. incidents which diverge from what is intended or what is expected. The principal aim of the study is to create greater understanding of how private customers perceive critical incidents in banking services. The central issues are what problems arise, how they develop and what their outcome is. Method development is also a major feature of the shady, which is primarily inductive. Over 300 private Swedish bank customers have been interviewed about the problems they experienced with banking services. The 'core problems' in a total of 272 reported episodes are classified in a set of categories. The induced categories are related to models of service quality which have been developed within the Nordic School of Services. They are then discussed in detail, related to concepts linked with the design of the service, design quality; to the correspondence between performance and intentions of the producer, service production quality; and to the interactive feature of the service, process quality. A majority of the categories are seen as being primarily related to the design of the service. The categories are exemplified episodically, with the aid of abstracts from the accounts given by customers, in contrast to previous studies where the results are presented statically. Further, six 'typical processes' are identified, illustrating processes which are important from a quality viewpoint and which can be related to the above concepts. In the majority of the episodes studied the outcome was negative, i.e. the problem was not resolved in a manner that the customer found satisfactory and this resulted in a deterioration of the relationship between bank and customer. More than a fifth of the customers changed banks as a result of the incident. In contrast to previous studies, the incidents led to an improved relationship in only a marginal number of cases. A condition for improving a relationship after a problem has arisen is activity - that the bank demonstrates an unambiguous desire to solve the problem in a manner which is convenient and reassuring for the customer.