In a record-breaking move from the Financial Conduct Authority, Barclays has been ordered to pay £26m for hapless handling of customers.
The FCA has warned other lenders over the handling of borrowers facing financial hardship in the wake of the Covid crisis, next the revelation that Barclays mistreated over ane.v one thousand thousand business organization as well as personal customers who fell behind on repayments.
According to the City regulator, the banking concern failed to reckon individual circumstances together with did not properly contact those who had fallen into arrears, eventually offer unaffordable payment plans.
This resulted inwards many prioritising their debt to Barclays in a higher place other crucial fiscal responsibilities, such every bit their mortgage or rent.
Some of the customers were facing financial difficulties due to recent bereavement.
The FCA was clear that this constitutes mistreatment, in addition to striking Barclays with the biggest fine they accept ever issued inwards response.
They likewise said that Barclays “failed to treat customers fairly or to human action alongside due science, care and diligence”.
In an apology argument, the depository financial institution said:
“Barclays is a responsible lender together with we strive to accomplish practiced outcomes for our customers.
Since the effect was showtime identified, nosotros have implemented a number of changes to our client journeys, systems processes together with colleague grooming to right it, together with the vast bulk of customers who were impacted take already been contacted.
We would like to apologise to those customers for non providing the degree of service we should take.”
In an endeavor to foreclose such mistreatment happening again, banks together with lenders are working with HM Treasury to create a novel criterion for handling payment plans for government-funded loans for small-scale businesses, only there are concerns that such standards may non extend to other forms of debt, such equally personal loans.
The Covid crisis has exacerbated this business organisation, alongside research from StepChange, a debt charity, showing that arrears take soared by 66% since May too that the number of people inwards severe debt has virtually doubled to one.two meg every bit people have taken on curt term loans.
As it stands, the collective sum of debt reaches £ten.3bn, only 3 million are idea to be at run a risk of falling into arrears and inflating this figure withal farther.