In mid-2020, Barclaycard started sending a letter to some customers saying where they may have had raised their credit limit too high.
See Barclaycard credit limit letters for details.
In 2018 Barclays started a major refund program to customers with overdrafts, loans or credit cards who had been charged interest when Barclays knew they were in financial difficulty.
The Arrears assistance review page on Barclays website says:
After a careful review, we found that from October 2013, we didn’t always provide the service we should have to some customers who were over their borrowing limit or behind in their loan or card payments.
We’re sorry and we want to make things right, so we’re returning interest and charges to those who might have been affected during this time.
What is the refund for?
The accounts affected include overdrafts, loans, Barclaycard accounts (including previous Egg card accounts) and Partner Finance accounts eg for car finance.
From what customers are being told when they ask, it seems Barclays now recognises that it did not properly assess customer circumstances when it knew they were in difficulties.
The Helpline says that Barclays has “been working collaboratively” with their regulator, the Financial Conduct Authority, about these refunds. The FCA’s rules say:
CONC 7.3.4 A firm must treat customers in default or in arrears difficulties with forbearance and due consideration.
CONC 7.3.5 Examples of treating a customer with forbearance would include …
(1) considering suspending, reducing, waiving or cancelling any further interest or charges (for example, when a customer provides evidence of financial difficulties and is unable to meet repayments as they fall due or is only able to make token repayments
The most common reason customers are being given for the refund or write off is that they are getting back interest and extra charges that Barclays now feels it should not have been added.
How many people are getting these refunds?
Barclays hasn’t said how many people are going to be refunded. However the review was originally mentioned on their website homepage so it must be large!
The first refunds started going out in March 2018 – initially these were low numbers.
A lot more refunds letters have been sent out in November and December 2018 – these mostly relate to Barclaycard accounts. Here are a couple of examples from readers – you can see these and other comments at the bottom of this page:
I received a letter offering £75 as an inconvenience payment and advising they are closing the account and I do not need to make any further payments. The balance is approximately £7,500! I can’t quite believe it.
I have had the same letter. £75 inconvenience payment and closure of the account. I was unwell in 2013 and required a period of time in residential care. I had around 5k owing on a Barclaycard.
One person was told by customer services that they were sending out 35,000 refund letters a week.
That suggests to me that Barclays is probably refunding hundreds of thousands of people.
The refund is automatic
You don’t have to put in a complaint or a request for a refund. Barclays will be contacting the people affected directly.
If you have moved and changed your phone, or you don’t think Barclays ever had your mobile number, Barclays may have difficulty contacting you. You may want to call them on 0800 328 6932 and give your new contact information.
Worried this is a scam?
Many people may be worried that a text or letter saying your bank is going to give you money is a scam. And if you no longer have a Barclays account, you will be asked for your new bank details…
The refund program is genuine. There are lots of customers commenting below to say they have received these letters. Everyone who has checked so far has found their letter or text is real.
The letter should contain details of the official helpline number for these refunds – 0800 328 6932.
If there is a different telephone number on the letter Barclays sent, you can put it into this Barclay’s phone number verifier. But if you want to be sure, the best way is to call the official helpline number.
What happens to your credit record
This depends on what your account currently shows. If you aren’t sure, check it now, see the best free ways to check your credit records.
If your account balance is being written off, the debt will be marked on your credit record as closed and partially settled, with a balance of zero:
- accounts where there is a default date drop off your credit record six years after that default date.
- if your account hasn’t been defaulted but is just in arrears, it will drop off six years after it is closed.
So records with a default date will disappear sooner and stop harming your credit score sooner. If there is no default date, you should think if you would prefer one to be added! See what should the default date be for a debt? If you would like a default added, I suggest you contact the refund helpline, say thanks for the write-off but you would also like a default date added when you got into difficulty.
Are you getting enough compensation?
This is hard to tell. It depends exactly what happened to you.
If you are being offered a standard £75 and Barclaycard caused you a lot of problems, you may want to say you should be offered more.
If you are told you are not on the list to get compensation, it is worth going back with a reasoned explanation about when they should have seen you were in trouble. For example, you may have complained about overdraft charges saying you couldn’t afford them.
It is worth talking to the helpline and saying if you think you should have a larger refund. Here is one example where reader has had success:
Told them I wished to challenge the charges pre 2013. They then transferred me to the complaints department that listen to my complaint, took my details and rang me back later that day for more info. A few days later they rang back to go through the story again. Went away for a hour and then rang back with a settlement offer.
Other things you may want to complain about include if you were offered a consolidation loan you couldn’t afford, or if you weren’t signposted to a place for free debt advice when you said you were in financial difficulty.
Originally published in March 2018, updated in December 2018