Barclays Fined £26 Million for Mistreating Borrowers

The United Kingdom’s Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) has slapped a fine of £26 million on three Barclays entities, Barclays Bank UK PLC, Barclays Bank PLC, and Clydesdale Financial Services Limited, for mistreating financially struggling consumers.

The regulator detailed that the banking giant poorly treated some retail and small business customers when they fell into arrears between April 2014 and December 2018 after receiving consumer credits.

Barclays was aware of the financial situation of the stressed customers since 2014 but failed to rectify anything due to 'systems and controls failures'. However, the bank resolved the problems subsequently under the FCA’s monitoring.

Since 2017, the bank redressed at least 1,530,000 customer accounts, paying over £273 million.

Creditors Need to Be Moral

The penalty came as the financial market regulator needs the consumer credit firms to take adequate measures to properly understand their customer credit difficulties. It further requires the firms to be lenient to the financially stressed customers.

“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,” Mark Steward, FCA’s Executive Director of Enforcement and Market Oversight, said.

Barclays pro-actively started the redressing program and did not object to the FCA’s heavy fine. The unquestioned acceptance of the penalty gave the bank a 30 percent discount, otherwise, the penalty amount could have gone up to £37.2 million.

“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 Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term continues to affect household incomes and budgets,” Steward added.