The FCA has handed Barclays and its subsidiary, Clydesdale Financial Services, a £26m fine for failings in its treatment of customers with various types of credit product who fell into payment difficulties.
The regulator found that between April 2014 and December 2018 some retail and small business customers who had consumer credit products with the bank were treated poorly when they fell into arrears.
During this time the bank offered various forms of unsecured lending including personal loans, car finance as well as overdraft facilities on current accounts and business accounts.
The watchdog says Barclays failed to treat customers fairly or to act with due skill, care and diligence when they were facing financial difficulties.
It says the bank did not follow its own contact policies for customers in arrears; failed to have appropriate conversations with customers to help understand the reasons behind payment problems; and did not properly evaluate their circumstances, with the result that it offered unaffordable or unsustainable forbearance solutions.
The FCA says these requirements are in place to ensure that customers in difficulty do not make repayments on a consumer credit loan at the expense of a priority debt, such as a mortgage, council tax, child support and utility bills.
Barclays identified some of the problems as early as 2014, but due to systems and controls failings these were not fully rectified.
Adequate measures to resolve the problems were subsequently taken. Barclays has contacted all customers whom they think may be due for compensation.
The FCA took the redress programme into account when setting its fine. Barclays did not dispute the FCA’s findings and agreed to settle the case. This meant it qualified for a 30 per cent discount on the penalty which would otherwise have been £37,223,500.
FCA executive director of enforcement and market oversight Mark Steward says: “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.
“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.”
