Barclays Prepares Compensation Payouts After Fresh FX Rate Scandal
On top of the penalties faced as a result of the LIBOR scandal, Barclays bank has set aside £290 million in foreign exchange compensation for customers who have been over charged on currency rates, it was announced yesterday. The legal and compensation costs for the first nine months of the year were approximately £2.3 billion which is certainly not the best news for the banks new boss, Jes Stalley. On top of this announcement, Barclays shares were also seen to decline by more than 5% to 239p, with Q3 profit down 10% year-on-year.
The bank declined to comment on the extent of the scandal, nor have they given any details as to exactly what has gone on, however, the City regulator has followed an internal review of foreign exchange transactions between 2005 and 2012, when it is believed that the bank was not applying the appropriate exchange rates on customer transactions.
The events surrounding FX payments at Barclays, reconfirms that foreign exchange and currency payments provided by high street banks, lack clarity and are hugely expensive. This is yet another example of traditional currency providers using their high profiles to take advantage of their customers, charging them way above the odds for their payments.
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