Context
The FCA has fined Barclays Bank UK PLC, Barclays Bank PLC and Clydesdale Financial Services Limited (Barclays), £26 million over the treatment of consumer credit customers who fell into arrears or financial difficulties.
The FCA investigation found that Barclays failed to treat customers fairly or act with due skill, care and diligence.
Barclays has pro-actively redressed the affected customers, paying over £273 million to at least 1,530,000 customer accounts since 2017 and the redress programme is close to completion.
Key points to note
- The FCA found that between April 2014 – December 2018 some consumer credit customers (both retail and small business) were treated poorly when they fell into arrears.
- Specifically, Barclays:
- failed to follow its customers’ contact policies for customers who fell into arrears
- failed to have appropriate conversations with customers to help understand the reasons for the arrears
- failed to properly understand customers’ circumstances leading it to offer unaffordable, or unsustainable, forbearance solutions
- The fair and appropriate treatment of customers experiencing financial difficulty remains a focus for the FCA and it is working to ensure firms raise standards in this area.
- The FCA expects firms to appropriately invest in staff who work in collections and recoveries, including training and effective management information, to allow firms to monitor customer outcomes and take appropriate action where needed.
- The FCA recognises challenges firms face due to coronavirus which it says only heightens the importance of firms treating customers in financial difficulty fairly and appropriately.