The agency said that Barclays had identified problems with its treatment of certain credit customers as early as 2014, but failed to address them
The UK’s Financial Conduct Authority (FCA) has fined Barclays £26 million ($31.6 million) for its treatment of consumer credit customers who fell into arrears on their loans or experienced other financial difficulties.
The British watchdog agency imposed the fine on Barclays Bank UK plc, Barclays Bank plc and Clydesdale Financial Services Limited (Barclays).
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, said Mark Seward, the FCA’s executive director of enforcement and market oversight, in a statement.
The FCA said Barclays has been proactive in redressing the matter by paying approximately £273 million to over 1.53 million customer accounts since 2017.
The agency added that Barclays had identified problems with its treatment of certain credit customers as early as 2014, but failed to address them because of internal control failures. Barclays has since instituted a program to compensate affected customers, which the FCA has been monitoring.
The FCA said the inappropriate behaviour took place between April 2014 and December 2018, during which time Barclays failed to follow its contact policies for customers who fell into arrears. The bank also failed to have appropriate conversations to help customers understand why they were in arrears and to “properly understand customers’ circumstances leading it to offer unaffordable, or unsustainable, forbearance solutions.”
The FCA found that Barclays failed to treat customers fairly or to act with due skill, care and diligence, the agency added in a statement.
According to the FCA, Barclays did not dispute its findings. The agency also took the bank’s redress program into consideration when setting the fine, which entitled Barclays to a 30 percent discount. Without the discount, Barclay’s fine would have been £37,223,500.