Yorkshire finance group hit by Wirecard scandal
Non-standard financial services provider, Morses Club, has seen one of its subsidiaries affected by the current suspension of regulated activity of Wirecard UK by the Financial Conduct Authority.
Wirecard UK is the card issuer and banking partner for U Account, a leading digital current account provider and division of Shelby Finance Limited, a subsidiary of the Birstall-headquartered company, and currently represents 2% of its income.
The action taken by the FCA on Friday, follows the news last week that the Wirecard UK’s German parent company had collapsed with debts of €3bn. This comes immediately after EY’s refusal to sign off the German firm’s 2019 accounts which brought to light a missing €1.9bn and led to the CEO resigning.
The resulting action, has meant U Account customer accounts have been temporarily frozen with access to view balances only. However all funds are in a client account with Barclays UK and as result are ringfenced and not at risk.
The FCA said at the time: “Our primary objective is to protect the interests and money of consumers who use Wirecard. Following last week’s news of €1.9bn missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. We have been working closely with Wirecard UK and other authorities over the past few days to take action that protects consumers.”
Morses Club has been in communication with the FCA directly to try and understand when a resolution will be found so that their customers can regain access to their own funds.
Paul Smith, Chief Executive Officer of Morses Club, said, “We understand the frustration and distress that the requirements imposed on Wirecard UK by the FCA are causing our customers. We are in regular contact with the FCA and Wirecard UK to understand the situation and find a swift resolution for our U Account customers. While our customers’ money is not at risk, we understand the difficulty this temporary suspension is causing our customers and we are working tirelessly to find a solution.”