Barclays has been fined by the UK Financial Conduct Authority (FCA) over the treatment of borrowers grappling with financial difficulties over a four-year period.
The FCA has imposed a fine of £26m ($34.7m) on Barclays Bank and its subsidiary Clydesdale Financial Services, and Barclays Bank UK.
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Between April 2014 and December 2018, some retail and small business customers were offered consumer credit by the bank and when they fell into arrears they were treated poorly, FCA said.
FCA noted that customers under financial pressure could end up making repayments at the expense of “priority debts” such as mortgage, council tax, child support and utility bills.
Specifically, FCA claims that 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.”
It also “failed to properly understand customers’ circumstances leading it to offer unaffordable, or unsustainable, forbearance solutions,” added.
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By GlobalDataThe lender did not oppose FCA’s findings and agreed to comply with its decision. As a result, the latest fine was imposed at a 30% discount.
Barclays already found some problems in 2014, however, it could not fully rectify them due to system and controls failings.
Since 2017, the banking group has proactively paid over £273m to remedy at least 1,530,000 customer accounts, as part of a redress programme, which is now close to completion.
While deciding the fine amount, FCA took into consideration the redress programme as well.
In a statement, FCA said: “The fair and appropriate treatment of customers experiencing financial difficulty remains a focus for the FCA and the FCA is working to ensure that firms raise their standards in this area.
“Firms should ensure there is appropriate investment in their staff who work in collections and recoveries, including in training and effective management information, to allow firms to monitor customer outcomes and take appropriate action where needed.”
