Barclays fined £26m for mistreatment of customers in arrears
The UK’s financial watchdog has fined Barclays £26m for failures in its treatment of customers who fell into financial difficulties.
The Financial Conduct Authority (FCA) found that Barclays had mistreated some retail and small business customers who fell into arrears between April 2014 and December 2018.
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It failed to follow its customers’ contact policies or help customers understand their arrears, and offered unaffordable or unsustainable solutions, the FCA said.
Barclays has proactively redressed these customers, the FCA said. The major UK lender has paid over £273m to at least 1.5m customer accounts since 2017.
The FCA’s fine took the redress programme into account. Barclays agreed to settle the case and therefore qualified for a 30 per cent fine discount. It is the watchdog’s fourth-biggest fine this year.
A Barclays spokesperson said: “Barclays is a responsible lender and we strive to achieve good outcomes for our customers.
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“Since the issue was first identified, we have implemented a number of changes to our customer journeys, systems, processes and colleague training to correct it, and the vast majority of customers who were impacted have already been contacted.
“We would like to apologise to those customers for not providing the level of service we should have.”
‘Poor treatment of customers’ at Barclays
Mark Steward, FCA executive director of enforcement and market oversight, said: “Consumers should feel reassured that their lender will work with them to help resolve any financial difficulties.”
But he said that “Barclays’s poor treatment of its customers risked making these difficulties worse”.
“Firms must treat consumer credit customers fairly, including when they find themselves in arrears. We will take action against unfair treatment, or where firm systems expose customers to the risk of unfairness.
“While this case predates the pandemic, this message is especially important as the impact of coronavirus continues to affect household incomes and budgets.”
The announcement comes after the FCA fined Lloyds Bank £64m in June for unfair treatment of mortgage customers.
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Goldman Sachs was fined £48.3m for conduct in the investment bank sector, while Commerzbank had to cough up £37.8m related to financial crime in retail banking.
The FCA’s fine applies to Barclays Bank UK PLC, Barclays Bank PLC and Clydesdale Financial Services Limited.