Barclays fined £26m for mistreating highly indebted borrowers.

Barclays was fined £26m by regulators after four years of mistreating customers who defaulted on their loans.

The FCA said business and personal customers who were late on their borrowing between April 2014 and December 2018 were not properly contacted by the bank.

She added that the banking giant had failed to help customers understand why they had fallen into arrears and offered unaffordable or unaffordable ways to get out of debt.

Barclays has been fined £26m by the Financial Conduct Authority for mistreating consumer credit borrowers.

Barclays has been fined £26m by the Financial Conduct Authority for mistreating consumer credit borrowers.

Lenders are required to take measures to properly understand the financial difficulties of customers and to show patience and due consideration to customers who are in arrears or financial problems.

Otherwise, those facing financial stress may end up making payments on a credit card or personal loan over priority debt, such as a mortgage, council tax, child support and utility bills.

The FCA said the bank, which accepted its findings, could have been charged up to £37.2m for its treatment of customers if it had not paid more than £273m to 1.53m borrowers over the past three years into its own compensation scheme. and settle the case.

The regulator said all customers eligible for compensation have been contacted.

Mark Steward, executive director of law enforcement at the regulator, said: ‘Consumers should feel assured that their lender will work with them to help resolve any financial difficulties, while Barclays’ mistreatment of its customers could exacerbate these difficulties.

Companies must treat consumer credit customers fairly, including when they find themselves in arrears. We will take action against unfair treatment, or when well-established systems put customers at risk of unfairness.

While this case predates the pandemic, this message is especially important as the impact of the coronavirus continues to take its toll on family incomes and budgets.

According to its latest findings, Barclays has offered more than 640,000 holiday borrowers worldwide since March.

As of the end of September, there were £4.4 billion of UK mortgages and £100 million of credit card balances still in payment holidays.

Across all major UK lenders, the number of mortgage holidays still in effect fell to 127,000 by November 20 and the number of credit card holidays to 55,000, according to UK Finance Trade.

Those who have not yet been granted a full six-month payment holiday can apply for one until the end of next March, while those urged by UK Finance should contact the lender.

Barclays said in a statement: “Barclays is a responsible lender and we strive to deliver good results for our clients.

Since the issue was first identified, we’ve implemented a number of changes to customer journeys, systems, and processes, and trained colleagues to correct it, and the vast majority of affected customers have already been contacted.

“We would like to apologize to these customers for not providing the level of service we should have.”

HSBC also refunds borrowers who have been mistreated

Meanwhile, an undisclosed number of borrowers of HSBC, First Direct, M&S Bank and John Lewis Finance, who have found themselves in arrears over the past decade, are receiving payments through the mail – but this is not part of the FCA investigation.

The news surprised some of the recipients, many of whom were no longer with the bank, so much that they wondered if the letters were a hoax.

One man, Nick Redman, tweeted at the end of last month: ‘Just got a cheque for £25 from HSBC. I haven’t dealt with them in about 6 years and they somehow have my new address which I only moved to in August. I’m so confused now I am.’

HSBC also sends checks of up to £100 to customers who fell behind on debt payments between 2019 and 2019 - some of whom haven't worked with the bank in years.

HSBC also sends checks of up to £100 to customers who fell behind on debt payments between 2019 and 2019 – some of whom haven’t worked with the bank in years.

However, HSBC, which runs all four banks, said an internal review found customers in arrears received poor service between 2010 and 2019 and checks of between £25 and £100 would be sent as a goodwill payment.

Anyone who deserves compensation will be contacted and mailed with a check.

In a statement, the bank said: “We always strive to do the right thing by our customers. Unfortunately, some historical cases where customers were sometimes late did not fulfill this commitment.

We are taking action to establish this right and to address customers who may have been affected. Customers do not need to do anything.

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