Britons regain access to fintech accounts as City regulator lifts freeze on Wirecard unit
By Michael O’Dwyer ACTIVITY on Wirecard accounts surged to three times their usual level yesterday as British consumers regained access after the City regulator lifted a freeze imposed last Friday to prevent customers’ money being disposed of by the firm.
The freeze had left hundreds of thousands of users of providers including FairFX, Pockit and subprime lender Morses Club’s U Account unable to access their money over the weekend and into Monday night.
Restructuring experts at Alvarez & Marsal are still exploring options for Wirecard’s UK business after its German parent filed for insolvency amid an accounting scandal.
The Financial Conduct Authority said: “We know some customers have faced difficulties over the weekend but the steps we took were the right ones to protect everyone’s money.”
The unfreezing of the accounts triggered an increase in transaction levels but a person close to Newcastle-based Wirecard UK said that customers were adding money to their accounts more often than usual as well as making more withdrawals.
Some providers had encouraged customers to hastily withdraw their cash before accounts were frozen on Friday, sparking fears of a “run” on accounts when they were unlocked.
Payments firms could be hit with new rules to shore up weaknesses in the sector exposed by the insolvency of Germany’s Wirecard. Agustin Carstens, president of the Bank for
International Settlements (BIS), said a more joined up approach may be needed to regulate the sector, which has grown to include fintech firms operating through mobile apps.
Mr Carstens, whose organisation acts as a bank for central banks, said it was too early to tell if tighter rules were the answer and that capturing payments firms that are not banks would be a key challenge. Shares in Wirecard AG, the
German parent company, briefly exceeded €9 (£8.22) before falling back. The shares were worth more than €100 before the firm revealed that it could not account for €1.9bn of cash on its balance sheet and admitted that the money probably doesn’t exist.
Wirecard’s staff in Germany still have not been paid their salaries for June, which should have been paid by last Friday, according to reports.
It came as a lawyers filed a criminal complaint in Austria against Markus Braun, Wirecard’s former boss, and Jan Marsalek, former chief operating officer, accusing them of market manipulation and serious fraud.
Mr Braun was arrested by German police last week before being released on €5m bail.
Wirecard declined to comment.
Lawyers have filed a criminal complaint in Austria against Markus Braun, Wirecard’s former chief executive