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Wirecard: Thousands of UK consumers have been blocked from accounts linked to the German company



The Financial Conduct Authority suspended operations of Wirecard Card Solutions on Friday after its parent company filed for insolvency in Germany following the discovery of a $ 2 billion hole in its accounts.

FCA said it made the decision so that Wirecard “does not have to pay or reduce” any money, except for instructions from its customers. Wirecard Card Solutions provides payment processing technology and services to dozens of UK digital account and prepaid card providers who have been forced to discontinue customer services.

“Our primary goal is to protect the interests and money of consumers who use Wirecard,” said the FCA in a statement. On Monday, the regulator said the company was making progress in addressing its concerns, but that it will not lift restrictions until it is comfortable that “all customer money is safe”

;.

Startup customers such as ANNA Money and Pockit cannot use their accounts to pay for purchases or withdraw money from ATMs. This prompted the UK Department of Labor and Pensions to set up dedicated help lines for people who rely on these accounts to receive government subsidies.

Pockit, which says it is for people who have been “ignored or rejected” by major street banks, has 500,000 customers, some of whom were expected to receive support payments on Monday.

The FCA has said that people in financial difficulty may be able to get help from a local social assistance scheme. “We are contacting the small number of applicants we believe have been affected to make sure they have the support they need and that they can access their money as quickly as possible,” said a spokesman for the Department of Labor and Pensions.

ANNA Money, a corporate banking startup, contacted customers on Friday telling them to urgently withdraw money from their accounts before they were frozen. It was too late for many. “We didn’t warn that Wirecard in the UK was in trouble,” the company now tells customers on its website. “The details of your ANNA card and the money in your ANNA account remain safe, but unfortunately you cannot currently access it.”

Wirecard claims insolvency after ex-CEO arrest in $ 2 billion scandal
He claimed to have been “repeatedly assured” by Wirecard Card Solutions that his parents’ problems would not affect his operations in the UK. The company said it’s talking MasterCard (BUT) on converting ANNA cards to a new payment provider.

Curve, which allows users to spend money from all their accounts using a single card, had already restored some of its services late Sunday. Its 1.3 million customers all have accounts with other banks.

“The phone call I received at 9 am on Friday was the worst a founder could hear – that our accounts would be closed imminently, because of us,” said Shachar Bialick, founder and CEO of Curve.

The company had initiated a planned migration from Wirecard a long time a few months ago, which accelerated over the weekend by moving some services to Checkout.com and moving some of them to the house, Bialick said. The changes were not related to Wirecard’s problems, a spokesman for CNN Business said.
Another Wirecard customer, Morses Club online lender, said on Monday that his U Account customer accounts were temporarily blocked with users who could only view sales. The company said it was talking to the FCA to find out when customers could be able to regain access to their funds, which they were kept securely in an account with. Barclays (BCS).
Mastercard and Visa are reportedly reconsidering their relationship with Wirecard following the accounting scandal

Last week, Wirecard went bankrupt after its auditor, EY, refused to sign the company’s balance sheet and stated that more than $ 2 billion was missing from his accounts. Markus Braun, Wirecard’s chief executive officer, who was arrested and then released on bail for $ 5 million ($ 5.7 million), suggested that the company itself could be subject to fraud.

Under UK e-money law, Wirecard Card Services is required to fence customers’ money into a separate bank account. These funds are not protected by the financial services compensation scheme, which acts as deposit insurance in the event of a bank bankruptcy.

Mastercard e Visa (V) are reconsidering whether to allow Wirecard to continue processing payments on its networks.

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