Security & Fraud

UK Financial Watchdog Says Wirecard Cooperative But Assets To Stay Frozen 

Wirecard

The United Kingdom’s regulatory authority said Wirecard AG was correcting issues raised by the $2.1 billion accounting scandal, but restrictions on the collapsed German payments company will stay, Reuters reported.

“We cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns, for example that all clients’ money is safe,” the Financial Conduct Authority (FCA) said in a statement. “We hope to be able to issue an update soon.”

A number of British FinTech firms have suspended services following the FCA’s restrictions on Wirecard, leaving hundreds of thousands of accounts blocked, the news service reported.

Wirecard said over the weekend it would continue to operate in all but one of its European locations as the court considers the company’s insolvency request.

A Wirecard spokeswoman said the firm was working with the FCA to lift the suspension at its Newcastle, England location as quickly as possible.

The FCA said it is working with Wirecard and other international and U.K. authorities.

The report said firms such as Pockit, the London-based financial technology company that offers an alternative to traditional banks, and U Account, the Sheffield, England digital bank, a subsidiary of subprime lender Morses Club PLC that provides finance to poorer clients, are among those hardest hit.

Government officials have said anyone locked out of receiving welfare payments should contact its helplines.

The Emerging Payments Association (EPA), an industry trade group, urged the FCA to lift its Wirecard freeze as soon as possible.

“We predict dozens of corporate failures, hundreds of job losses and significant reductions in tax payments, unless it is removed right away,” the EPA said in a letter to the FCA, Reuters reported.

Martin Lewis, founder of Money Saving Expert, a consumer website, told the news service there was a reasonable expectation that consumers affected would get access to their money by Thursday.

Wirecard has been in the middle of a storm for nearly two weeks since auditors could not find missing deposits the company said had been deposited in two Philippine banks. Markus Braun, Wirecard’s founder and CEO, was arrested last week on charges of manipulating the market and misrepresenting accounts. He has denied any wrongdoing, posted bond and was released.

As reported in this space Monday (June 29) the Financial Times sounded the alarm over Wirecard in an early 2019 article that said the company had forged documents connected to Wirecard’s Asian business in a bid to mislead regulators.

——————————

WATCH LIVE: HOW WE SHOP – TUESDAY, NOVEMBER 10, 2020 – 12:00 PM (ET)

New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.

TRENDING RIGHT NOW