Barclays Arrears Scandal : Renting Rubin VI

AstraZeneca controversies examined in Renting Rubin through Daniel Rubin’s secondment and the company’s regulatory record

The Barclays arrears scandal ended with a £26 million FCA fine and more than £273 million in customer redress. Before that came the quality checks that could pass an unfair outcome, the repayment plans that people could not sustain, and the financial breathing space that still had a fucking meter running.

The telephone rang. Somewhere inside Barclays, this could count as progress even when the person making the call immediately hung up. Out in the world where money bought food and kept the lights on, progress required a little more than that. It required somebody to stay on the fucking line.

By December 2020, the FCA had put a price on failures spanning April 2014 to December 2018. Retail borrowers and some small businesses had entered the bank’s collections machinery in financial difficulty and encountered arrangements that could make the trouble worse. Welcome to the rescue desk. Please have your account number and remaining dignity ready.

Our earlier Barclays visits covered manipulated markets, the whistleblower hunt, Qatar, motor-finance commissions and securities sold beyond registered capacity. Now we follow the money into the room where there is none. It is a smaller room, with uglier acoustics.

Renting Rubin: Prestige On Credit

Daniel Rubin’s Horsfield Menzies biography advertises secondments to Barclays, BT and AstraZeneca. Alongside those names sit boardroom disputes, regulatory investigations and the importance of “reputation management and investor confidence”. A fine collection of professional luggage. You can almost hear the little wheels crossing the executive lounge.

The Barclays secondment comes without dates or duties, and the evidence does not place Rubin in this collections operation. The connection is the credential Horsfield Menzies advertises. Barclays supplies prestige to the biography; Renting Rubin examines what travels inside the prestigious name.

This is how a corporate reference works its quiet magic. A familiar institution appears in the paragraph and the reader supplies the reassuring adjectives. Experienced. Trusted. Comfortable around serious people doing serious things with serious amounts of other people’s money. Nobody asks to inspect the service record because that would spoil the upholstery.

However, a name large enough to impress a prospective client is large enough to withstand a look underneath it. The professional glow should survive contact with the organisation that produces it. Otherwise, we are dealing with a very expensive lampshade.

So keep the Barclays credential in view. By the end of this visit, the polished talk about reputation will have spent some time beside the people who needed practical help from the bank supplying it.

Barclays Arrears Scandal: Failure Gets A Pass

An October 2013 internal audit found that a call could pass quality checks despite an unfair customer outcome. There it is: the little brass key to the whole madhouse. A system checking the quality of customer service could give a passing mark while the customer came out badly.

You could spend a fortune designing a more elegant way to misunderstand your own job. The performance passes; the person fails. Somewhere between those two results, a respectable institution loses the ability to tell whether it is providing assistance or merely performing the movements associated with assistance.

By March 2015, a review of 30 vulnerable or potentially vulnerable UK card customers found 25 poor outcomes. That is 83 per cent of this particular sample, not a finding about every Barclays customer. Nevertheless, five good outcomes from 30 selected cases is a miserable collection of survivors to parade beneath a quality banner.

For the borrower, meanwhile, a polite conversation cannot make an impossible payment affordable. You can pronounce every syllable of financial difficulty with exquisite sensitivity and still propose something that sends the person straight back into it. Manners do not balance the account.

The Barclays arrears scandal therefore gives us a useful test for institutional reassurance. When the process receives a certificate, ask what happened to the person inside it. A beautifully calibrated weighing machine is no consolation if the bloody thing is measuring the wrong animal.

Ring, Disconnect, Repeat

The FCA notice records a practice called “call dumping” in parts of collections. Staff dialled customers and immediately hung up to meet daily call targets. Even the name sounds like something discovered behind a motorway service station.

In that little click sits the whole fever dream: activity without contact, performance without service, a scoreboard applauding a conversation that never happened. The counter climbs; the debtor remains where they were. No useful words need pass between them. You could hang a headset on a metronome and begin discussing its promotion prospects.

Meanwhile, the actual purpose of the call waits outside the arithmetic. Somebody has fallen behind. Something has changed. There may be a workable arrangement, but finding it requires the inconvenient business of allowing another human being to finish a sentence.

This is where a target can turn feral. Once the count becomes the achievement, the work it supposedly represents becomes an obstacle to achieving it. Listening takes time. Understanding takes longer. Disconnecting is wonderfully efficient, provided nobody asks efficient at what.

The record does not need an invented conversation with a sinister executive. Its documented absurdity is quite sufficient. A department handling people in difficulty contained a practice that improved the activity count by preventing contact. If that passes for productivity, somebody should unplug the fucking scoreboard before it receives a bonus.

A Payment Plan Cannot Print Money

In 2015, the FCA challenged policies that prioritised commercial returns over customer outcomes. It also found inadequate understanding of borrowers’ circumstances and repayment arrangements that people could not afford or sustain. The rescue equipment needed rescuing.

There is a particular kind of institutional madness in treating agreement to a number as evidence that the number exists. A frightened or exhausted person can say yes. They can want desperately to say yes. However, neither desire nor compliance causes money to materialise behind the sofa.

An affordability assessment should settle that question before the bank starts celebrating an arrangement. Otherwise, the plan is a cheque drawn on optimism. It looks official, carries a date and becomes worthless at precisely the moment somebody tries to use it.

The FCA’s concern also reached beyond Barclays’ own accounts. Payments towards consumer credit could take money away from priority commitments such as housing and utilities. Consequently, a successful collection could coexist with a worse position for the customer. The till might ring while another essential bill waited unpaid.

That is why the Barclays arrears scandal cannot be reduced to a few awkward telephone calls. The question is what the conversation sets in motion. If the arrangement requires a borrower to pretend their actual life costs less than it does, the bank has acquired a promise with a short fuse.

A debt does not disappear because repayment becomes difficult. Equally, a bank does not become competent merely by insisting that it exists. The difficulty is the reason for the department.

£400, Bereavement And The Long Way Round

One woman in the FCA’s case studies had a card with a £400 limit. She reported bereavement in January 2017, but Barclays failed to assess her finances adequately across repeated conversations. The bank identified vulnerability in May, arranged unsustainable repayment plans, and issued a default in September.

Four hundred pounds of available credit. We have left the grand halls of international finance and reached the sort of sum a household can feel in its stomach. There is no exotic instrument to decode here, no offshore structure requiring a map and three languages. Somebody needed the bank to understand what she could manage.

Bereavement entered the conversation, yet useful understanding did not follow adequately. That is the ugliness of the episode. The customer could supply information about her life without receiving an arrangement properly grounded in it.

Corporate language would call this a customer journey. What a lovely phrase for repeated conversations that fail to produce a sustainable answer. It puts a little suitcase and a cheerful destination board beside a process the customer has no particular desire to be travelling through.

We need not invent her thoughts to recognise the failure. Nor should the modest credit limit make the treatment seem modest. A problem does not become small because it fits comfortably inside somebody else’s expenses claim.

The bank had the machinery of organised finance behind it. She needed a workable answer about a limited account. Somewhere in that grotesque mismatch of resources, competence should have been the cheapest thing Barclays supplied.

Even The Breathing Space Came With Charges

Barclays also wrongly applied interest and charges during some breathing-space or hold periods. These findings concern the bank’s arrangements in the period under review, rather than the later statutory Breathing Space scheme. The supposed pause did not reliably stop the meter.

And there, finally, is the title. The financial first-aid station had a fucking card reader attached to the oxygen mask. A borrower could reach the part of the process associated with relief and still encounter charges that should not have been there.

Consider the practical insult. You seek time to get your finances under control, then discover that the assistance requires its own inspection. What has stopped? What continues? How much will you owe when the reassuring conversation has finished doing its work on your nerves?

A person already struggling with an account should not have to become the bank’s unpaid quality controller. Yet that is the burden defective support pushes towards the customer: understand your difficulty, explain it, negotiate the response and then check whether the response actually does what it should.

Forbearance is a wonderfully dignified word. It arrives wearing a dark suit and carrying the suggestion of patience. However, dignity in the terminology cannot repair a charge on the statement. For the customer, the arithmetic has to behave.

The Barclays arrears scandal turns that distinction into a simple, unpleasant picture. The bank offers room to breathe, while part of the machinery keeps counting. Even the pause has developed an appetite.

The Warning Light Had Become Office Furniture

The FCA said Barclays identified problems during the relevant period but failed to put them fully right because of inadequate systems and controls. Eventually, the bank took remedial action. Customers had to occupy the interval between institutional recognition and institutional competence.

That interval is where corporate language breeds. A weakness becomes a workstream. Somebody owns an action. Another person reports progress against the action, and soon there is enough activity to furnish a meeting without necessarily improving the next customer’s afternoon.

Of course a large operation takes work to repair. That is precisely why the repair must reach the operation. A man standing beside a leaking pipe with a beautifully formatted timetable is still a man standing beside a leaking pipe. The floor does not give a shit about his milestones.

For somebody in arrears, the relevant deadline is closer and less ceremonial. The next payment arrives. Another bill needs attention. Meanwhile, the institution can speak in programmes and phases because it has departments available to absorb the vocabulary.

The customer has a household budget. It offers fewer opportunities to rename a continuing problem as an encouraging development.

This is the difference between knowing where the warning light sits and doing something about the fault. Leave it glowing for long enough and people begin to treat it as part of the décor. Then the regulator arrives, reads the service history and asks why everyone has been admiring the dashboard.

£273 Million Moving In The Other Direction

By the December 2020 announcement, Barclays’ redress programme had paid more than £273 million across at least 1.53 million customer accounts. Accounts do not necessarily mean separate people. The £26 million FCA penalty was additional, and the bank received a 30 per cent settlement discount after accepting the findings.

For once, a substantial flow of money travelled back through the machinery towards the customers. Redress is a remedy with practical value. It deserves more respect than the cheap trick of pretending nothing counts once the original damage has occurred.

Barclays apologised and described changes to systems, processes and staff training. The regulator recognised remedial work and made no finding that the bank had acted deliberately or recklessly. However, a failure does not require a secret plan to become expensive, exhausting or unfair.

There is no need to manufacture a conspiracy when the documented operation supplies this much material. Ordinary institutional failure, adequately resourced and allowed enough time, can produce a bill that makes a villain’s special equipment look like unnecessary overhead.

The correction matters. So does the history that made it necessary. Returning money can repair a balance without making the earlier service competent, just as fitting the handrail does not erase the fall.

A bank may close a regulatory chapter and move on to the next presentation. The record remains available to anybody who wants to understand what the polished corporate name has actually stood over.

Renting Rubin At The Collections Desk

Bring that name back to Horsfield Menzies and its professional biography. Barclays sits there as an assurance of experience, surrounded by the language of sensitive issues and reputation. After this tour, it carries rather more luggage than the sentence initially suggested.

The Barclays arrears scandal concerns an elementary obligation: understand the person’s difficulty before deciding what help they can use. All the institutional weight should make that easier to deliver. Otherwise, size merely gives failure more telephone lines.

That is what makes the credential worth examining. A famous corporate name can tell us where somebody gained experience; the name alone cannot settle what judgement a reader should attribute to it. Prestige is a starting point for questions, not a substitute for answers.

Reputation management becomes a hollow trade when the description of the business receives more attention than the experience of the people dealing with it. You can polish the language until it reflects the boardroom ceiling. The customer still needs somebody who understands the account.

Our fifth visit found Barclays selling beyond the capacity it had registered. The sixth finds another gap between the institutional mechanism and the reality it was supposed to control. Different department, familiar confidence, another substantial bill when the numbers finally meet the world.

Keep the secondment on the biography. TCAP will keep the service record beside it. Somewhere between the famous name and the reassuring adjectives sits a telephone call that never became a conversation, and a borrower for whom another green light meant absolutely fuck all.

Lee Thompson – Founder, The Cummins Accountability Project

Renting Rubin : Barclays VI – Even The Breathing Space Came With Charges