The Financial Conduct Authority has fined Barclays Bank UK PLC, Barclays Bank PLC and Clydesdale Financial Services Limited (Barclays) £26m for poor treatment of consumer credit customers in financial difficulties.

Barclays has now paid out over £273m in compensation to at least 1,530,000 customer accounts since 2017 with the redress programme now close to completion.

The FCA said the fine was imposed because Barclays had:

• 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
• failed to properly understand customers’ circumstances leading it to offer unaffordable, or unsustainable, forbearance solutions

Mark Steward, executive director of enforcement and market oversight, said: “Consumers should feel reassured that their lender will work with them to help resolve any financial difficulties, whereas Barclays’s poor treatment of its customers risked making these difficulties worse.

“Firms must treat consumer credit customers fairly, including when they find them in arrears.”

The case predates the pandemic with problems spotted as early as 2014.

Between April 2014 and December 2018 some retail and small business customers who had been offered consumer credit by Barclays were treated poorly when they fell into arrears, the FCA said.

The watchdog found that Barclays had failed to treat customers fairly or to act with “due skill, care and diligence.”

The FCA requires consumer credit firms to take adequate measures to properly understand customers’ financial difficulties.

It also requires firms to show forbearance and due consideration to customers in arrears or in financial difficulties.

Barclays identified some of the problems as early as 2014 but due to systems and controls failings these were not fully rectified.

Measures to correct the problems were subsequently taken, said the FCA, with all customers contacted. The FCA has monitored this programme, it said.

The FCA said the “fair and appropriate treatment of customers experiencing financial difficulty” was essential and firms should ensure appropriate action is taken where needed, especially due to the challenges now being faced during the pandemic.