Regulation

FCA fines Barclays £26m over treatment of customers in arrears

Rozi Jones
|
15th December 2020
fca new reception
"Consumers should feel reassured that their lender will work with them to help resolve any financial difficulties, whereas Barclays’s poor treatment of its customers risked making these difficulties worse."

The FCA has fined Barclays Bank £26 million for failures in relation to their treatment of consumer credit customers who fell into arrears or experienced financial difficulties.

The investigation found that between April 2014 and December 2018 some retail and small business customers who had been offered consumer credit were treated poorly when they fell into arrears. The FCA says Barclays "failed to treat customers fairly or to act with due skill, care and diligence".

The FCA found that Barclays failed to have appropriate conversations with customers to help understand the reasons for the arrears and failed to properly understand customers’ circumstances, leading it to offer unaffordable or unsustainable forbearance solutions.

Barclays identified some of the problems as early as 2014, but due to systems and controls failings these were not fully rectified.

Barclays has since contacted all customers whom they think may be due for compensation and has redressed these customers, paying over £273 million to at least 1,530,000 customer accounts since 2017.

The FCA took the redress programme into account when setting its fine. Barclays did not dispute the FCA’s findings and agreed to settle the case. As a result, they qualified for a 30% discount and the financial penalty would otherwise have been £37,223,500.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "Consumers should feel reassured that their lender will work with them to help resolve any financial difficulties, whereas 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."

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