What went wrong with Barclays?
The Financial Conduct Authority (FCA) found that between April 2014 and December 2018, some retail and small business customers who were offered loans or credit cards by Barclays were not treated properly when they fell. in arrears. He revealed that Barclays failed to treat its customers fairly or to act with “due skill, care or vigilance.”
In practice, this meant that Barclays:
- Did not follow its own customer contact policies who had accumulated arrears.
- Failed to have appropriate conversations with these clients, which would have helped him understand why the customer was in arrears.
- Provide assistance to late-paying customers that was unaffordable or unsustainable, because he hadn’t fully understood their situation.
The FCA says Barclays had already identified some of these issues as early as 2014, but further failures in its systems and controls meant the issues weren’t fully resolved for several years.
While Barclays does not have a standard definition for deciding who is classified as “in arrears,” it says it follows FCA guidelines on the matter – and this generally defines arrears as a shortfall in a business. or more payments that a customer had agreed to Fabricate.
All businesses offering consumer credit products should take the appropriate steps to understand their customers’ circumstances and be tolerant when customers are struggling financially – and this is even more crucial now, as the coronavirus pandemic continues. affect people’s finances. Without the proper support, clients who are in arrears might end up prioritizing paying off a loan or credit card when they should be focusing on paying off “priority debt,” such as debt. ” a mortgage, housing tax, child support or utility bills.