Barclays’ behaviour towards its customers is the latest example of bad banking
Earlier this week I interviewed Nick Leeson, the derivatives trader whose risky bets infamously brought down Britain’s Barings bank in 1995.
After the actions of Barclays in the UAE over the past couple of days, I had half a mind to ask Nick if he fancied coming out of retirement and having a go at taking down one or two of the lenders over here.
In case you missed it, the local operation of the London-based bank decided to relieve its books of about 500 or so personal and corporate clients this week. Only not all of them seemed to know about it.
Over the past few days Arabian Business has been inundated with messages from unhappy (ex) customers, many of whom claim that Barclays rang them to tell that their account had been frozen, and would they kindly come right away to collect their balance. One person we spoke on Tuesday told us that the bank was refusing to hand him the cash in his account, as Barclays had already mailed him a cheque for everything he had some weeks earlier. He said he had never received it.
While the reasons for the account closures seemed muddled even among Barclays staff (one apparently told a customer it was because “they were Iranian”), the message coming from HQ was crystal clear.
In a statement sent to Arabian Business, the lender said it had closed the accounts in order to comply with financial regulations set out by the Central Bank.
“The bank has identified certain accounts with expired/deficient information and/or documentation and have repeatedly reached out to customers to remediate. For customers who did not provide the required information/documentation, Barclays had to take the necessary consequential action and hence accounts were blocked,” it read.
Customers beg to differ, however. All of whom Arabian Business has spoken to since the statement was sent out said that all of their documentation with the bank was up-to-date and that they received no correspondence regarding account closures.
This is the second time in recent months that a big, international bank has become embroiled in controversy over such actions. Earlier this year, HSBC gave a number of SME customers 60 days to vacate after it informed them by post that it no longer required their business.
Given the pedigree of financial institutions like Barclays and HSBC, should they not be leaving the domestic competition (who are far from perfect themselves) for dust? Apparently not.
One thing is for certain though. With Barclays having last month announced its intentions to sell off its retail business in the UAE, we will not have to put up with this sort of attitude to customers for much longer.