Barclays Faces $1M Penalty Over Payments Firm Collapse

Barclays Bank Plc has been fined 783,800 pounds ($1 million) by the United Kingdom’s financial regulatory body for its failure to oversee Premier FX, the collapsed payments firm.

The penalty stems from the London-based multinational bank’s agreement to cover the losses of Premier FX, the Financial Conduct Authority (FCA) announced Monday (Feb. 28).

One year ago, the FCA censured Premier FX for its failure to protect customer’s money and misleading consumers about the services it was licensed to provide Barclays was Premier FX’s sole banker in the U.K.

At the time, Barclays agreed to pay 10 million pounds ($13.5 million) to reimburse 167 Premier FX customers for 100% of their money. The voluntary payment to these customers is to be completed by the end of March.

The FCA said Barclays’ agreement to meet the lack of Premier FX’s funds mitigated the losses to its customers.

Barclays was aware of the high risks in providing banking services to Premier FX but failed to take reasonable appropriate steps to mitigate those risks, Steward added.

“This constituted a failure by Barclays to conduct its business with due skill, care and diligence,” said Mark Steward, executive director of enforcement and market oversight at the FCA, in a statement.

In a statement, a Barclays spokesperson confirmed that it reached a financial resolution with the FCA following an investigation into its oversight and monitoring of a former customer, Premier FX.

Last year, the FCA issued 568 million pounds ($775 million) in fines as a rise in financial crime was fueled by the pandemic.

Read more: UK’s FCA Issued $775M in Fines in 2021

The total is comprised of fines against major banks, as well as levies against people for insider dealing, non-financial misconduct and carrying out regulated activities with no authorization, the FCA said.

“The pandemic has provided criminals with the opportunity to defraud, launder and perpetrate other forms of financial crime with more efficiency than ever before,” said Henry Balani, a regulation expert from Encompass Corp.