Interactive Investor

Wirecard customers get access to money after collapse

UK financial watchdog eases restrictions on the company

1st July 2020 15:52

Brean Horne from interactive investor

UK financial watchdog eases restrictions on the company

Customers can now make payments using Wirecard, as the Financial Conduct Authority (FCA) lifted restrictions on the company.

Wirecard is a German-based payment processor and issues cards for several financial brands in the UK including Curve, FairFX and Pockit.

The FCA revoked the licence of Wirecard’s UK arm after it filed for insolvency last week.

Thousands of people were left unable to access their money including customers who used banking apps such as Dozens, FairFX, Pockit and U.

In a statement, the financial watchdog confirmed that the restrictions on Wirecard have now been eased and customers should shortly be able to use their cards as usual.

“We continue to monitor Wirecard’s activities closely and certain requirements continue to remain in force. These should not, however, affect the services Wirecard provides to its customers. This means customers can now or very shortly use their cards as necessary,” says the financial watchdog.

Customers still experiencing difficulty are being advised to contact their card provider directly by the FCA.

Is your money protected?

Money held by on prepaid cards is not protected by the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 of customers’ money if a UK-authorised bank go bust.

This is because funds on a prepaid card are classed as “electronic money” or “e-money,” which do not qualify for protection. 

As a result, if your prepaid card provider goes bust, your money will be subject to their safeguarding terms.

These terms usually mean that your money will be placed into a ring-fenced account which is separate from the company’s own money.

In the event that the provider goes bust, they have to repay you from the ring-fenced funds before they pay out what they owe to others.

Beware of scams

The FCA is telling Wirecard users to remain vigilant as fraudsters may begin to target those affected by the incident.

The following steps can help you avoid being caught out by a scam:

Stop: Take a moment to stop and think before parting with your money or information could keep you safe.

Challenge: Could it be fake? It is fine to reject, refuse, or ignore any requests. Only criminals will try to rush or panic you.

Protect: Contact your bank immediately if you think you have fallen for a scam, and report it to Action Fraud. You can report the firm or scam by contacting the Action Fraud consumer helpline on 0800 111 6768 or by using an online reporting form.

This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

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