Barclays has been fined £26m for the unfair treatment of customers who fell into debt or are experiencing financial difficulties.
The Financial Conduct Authority (FCA) said Barclays ‘poor treatment of its customers’ risked making difficulties worse. The FCA further went onto say ‘Barclays knew about many of the shortcomings but failed to adequately resolve until late 2018’.
What happened?
The problems mainly affected individual current account holders and small business customers between April 2014 and December 2018. The FCA found customers treated poorly when they fell behind on credit payments with no sustainable or affordable debt repayment plans.
The FCA states, ‘Barclays failed to contact people quickly enough’ leading them to more debt charges. The FCA further states Barclays failed to meet the principle of good regulations as staff members did not have an appropriate conversation with customers and failed to grasp the severity of the financial problems the customers were facing.
Then, when the repayments plans were put in place, they were delayed, included errors, had mistakes with payments, and charged interest or fees during breathing space of holding a payment.
Taking responsibility
A Barclays spokeswoman said "Barclays is a responsible lender and we strive to achieve good outcomes for our customers. We would like to apologise to those for not providing the level of service we should have."
She added that Barclays since then had made a number of changes to its systems, processes, and training to correct the issue and that the vast majority of customers have already been contacted.
Notes:
The FCA found that Barclays breached Principle 6 and Principle 3 of the FCA’s Principles for Business.