The U.K.’s Financial Conduct Authority (FCA) has fined financial giant Barclays plc £26 million for treating customers poorly when they ran into financial difficulties.
In addition to the regulatory penalty, the firm has paid more than £273 million in redress, to 1.53 million customers, the FCA said.
Among other things, the FCA said that the bank didn’t properly deal with customers that fell behind on their bills. The bank failed to understand their situation and provide viable payment solutions.
Instead, Barclays offered clients unaffordable, or unsustainable, arrangements, the regulator said.
The FCA noted that Barclays identified some of these issues back in 2014, but didn’t fix them “due to systems and controls failings.”
Now, the bank has resolved these failings and provided customers with redress.
Barclays also settled the FCA’s case against it, qualifying for a 30% discount on its penalty, which would otherwise have been £37.2 million.
The regulator noted that the conduct in question predates the widespread economic distress inflicted by the Covid-19 outbreak. It added that the obligation to treat customers fairly is particularly important, given the financial stress facing many households due to the pandemic.
“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,” the regulator said.
“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,” the FCA said.