Barclays share price: Watchdog slams group over PPI reminders

CMA takes action against blue-chip lender

Barclays share price: Watchdog slams group over PPI reminders

The Competition and Markets Authority (CMA) has taken action against Barclays (LON:BARC) after it failed for the second time to send annual reminders to payment protection insurance (PPI) customers, the watchdog has said. The news marks a new legal challenge for the lender after it recently emerged that the Serious Fraud Office was seeking to reinstate charges against the lender over its  Qatar fundraising during the financial crisis.

Barclays’ share price has slipped marginally into the red in today’s session and was standing 0.20 percent lower at 188.18p as of 09:54 BST. The shares are underperforming the broader UK market with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.70 percent higher at 7,717.26 points.

CMA to take action against Barclays

The CMA announced in a statement yesterday that the CMA had issued Barclays with legal directions  requiring it to put appropriate systems and procedures in place, after the group  failed to provide a reminder to 2,265 Littlewoods credit card PPI customers between October 2016 and October 2017. The watchdog further noted that it was not the first time the company had breach its 2011 order, which requires customers to receive an annual reminder from their provider setting out clearly how much they had paid in, and their right to cancel the policy.

“The annual reminder is an important measure so customers know they still have a PPI policy and how much it is costing them each year, as well as their right to cancel or switch,” Adam Land, the CMA’s Senior Director of Remedies, Business and Financial Analysis, said in the statement. “This is Barclays’ second breach of the PPI order. As a result, we are issuing legal directions which can be enforced by a Court, to ensure they comply with the order.”

Lender says issue has been resolved

The Telegraph quoted a spokesman for the FTSE 100 group as saying that the issue had now been resolved.

“We have written to all affected customers to apologise unreservedly and to outline how we will recompense them where they would have otherwise cancelled their policy,” the spokesman pointed out, adding that the group took “this matter extremely seriously and have conducted an internal investigation to ensure all stringent controls and policies continue to be upheld”.

As of 10:46 BST, Tuesday, 07 August, Barclays share price is 188.18p.

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