Barclays plc is one of the most famous banks in the U.K. It is worth mentioning that, the U.K.’s Financial Conduct Authority (FCA) has slapped a fine of £26 million on three Barclays entities: Barclays Bank UK PLC, Barclays Bank PLC, as well as Clydesdale Financial Services Limited for mistreating financially struggling consumer.
Based on the information provided by the regulator, 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. It is worth noting that, Barclays was aware of the financial situation of the stressed customers since 2014. However, the bank failed to rectify anything due to systems and control failures. Nevertheless, the bank resolved the problems subsequently under the Financial Conduct Authority’s monitoring.
As a reminder, the bank redressed at least 1,530,000 customer accounts, paying more than £273 million.
Barclays and legal aspects
Importantly, the penalty came as the FCA needs the consumer credit firms to take adequate measures to properly understand their customer credit difficulties. Also, it further requires the firms to be lenient to the financially stressed customers.
People should take into account that, consumers should feel reassured that their lender will work with them to help resolve any financial difficulties.
Hopefully, Barclays pro-actively started the redressing program and did not object to the FCA’s heavy fine. Importantly, the unquestioned acceptance of the penalty gave the bank a 30% discount. The bank made the right decision, otherwise, the penalty could have gone up to £37.2 million.
It is worth noting that, firms must treat consumer credit consumers fairly, including when they find themselves in arrears. The financial regulator will take action against unfair treatment, or where firm systems expose customers to the risk of unfairness. Banks should work with customers to solve all pressing issues.