Martin Lewis: 'Signs that Pockit, Anna Money, Fair FX and other Wirecard accounts may be unlocked this week'
Hundreds of thousands of prepaid card users, including those with Pockit, Anna Money and FairFX, have had their accounts frozen after action by the UK regulator, with many left unable to buy essentials, pay bills or access their cash. But the regulator now says it's working to lift its restrictions, and MSE founder Martin Lewis says there are signs those locked out may be able to access their money later this week.
Update Tuesday 30 June: Customers' cards are now beginning to work again. See our Wirecard restrictions lifted MSE News story for full info.
The crisis comes after regulator the Financial Conduct Authority (FCA) ordered the payment processing firm behind these accounts, Wirecard Card Solutions Ltd, to suspend UK operations after a major accounting scandal at its German parent company.
Curve customers have been told they can now spend with their physical card as usual, and they should be able to pay via Google Pay, Apple Pay and Samsung Pay by the end of Monday. We'll continue to update this story as we get new info from affected firms and the FCA.
For more info on how prepaid cards work and our current top picks, see the Prepaid Cards guide.
In a statement published on its site on Monday morning, the FCA said: "Following last week's news of €1.9 billion missing from the accounts of the German company Wirecard, we immediately placed requirements on the firm's UK business so that it should stop carrying out regulated activities and not pay out or reduce any money it holds for its customers except on their instructions.
"Our primary objective all along has been to protect the interests and money of consumers who use Wirecard. Teams from across the FCA have been working with the firm, and other international and UK authorities, over the weekend, and we have seen good progress by the firm in meeting the conditions we set.
"We are maintaining pressure on the firm to resolve these issues, which would allow it to operate under certain conditions. However, we cannot lift the restrictions without reassuring ourselves that the firm have been able to satisfy all our concerns, for example, that all client money is safe. We hope to be able to issue an update soon."
MoneySavingExpert.com founder Martin Lewis said: "Decoding the FCA's statement, those who are locked out of their accounts have a reasonable expectation that they will see the money by the middle of this week – Wednesday or Thursday. And speed is crucial. 100,000s of accounts have been frozen, including those of many vulnerable people who use these payment accounts as their primary form of 'banking' and it's where their social security payments are made. The lack of access to their funds has left many in a state of extreme anxiety.
"The regulator's statement that it is seeing 'maintaining pressure' and 'hopes to issue an update soon' is clearly tightly passed through lawyers, but it can be read as a positive note, indicating that so far things are currently on the path to resolution, and the money seems to be where it should be. So unless something unexpected is discovered meanwhile, people will likely be re-allowed access to cash within days.
"Until then, those who are due social security payments via these accounts in the next couple of days should contact the Department for Work and Pensions, as it is working out alternative arrangements. And those who have money locked away and are in urgent need will be allowed to access the coronavirus-type emergency funding at local councils – however, I do have some questions about whether that money can be distributed so quickly."
Which cards are affected?
Wirecard provides the underlying payment services for a large number of cards. Some of the biggest cards which were not working for users as of Monday afternoon were:
- Pockit. A prepaid card you can top up and spend from, though many people use it like a current account for everyday spending and bills, eg, by direct debit. Pockit has 500,000 customers and its chief executive Virraj Jatania told MSE many of its users are vulnerable, may be on benefits and may not qualify for a standard current account. They may hold sums of anything from a few pounds to the maximum £5,000 account limit.
- FairFX. A prepaid card which allows you to load foreign currencies on to it for use abroad. We've asked how many customers are affected and will update this story when we know more.
- Anna Money. A prepaid card aimed at small business, but many of these businesses use the account like a current account. It hasn't so far told us how many customers are affected, but last year there were reportedly a few thousand cards in circulation.
A large number of other products are also affected, though in many cases these may be legacy cards which are only used by a limited number of customers.
Travel prepaid cards which we've confirmed are affected and are currently suspended include the Asda Travel Money Currency Card, BA Executive Club Cash Passport, Brittany Ferries Prepaid Euro Card, Ramsdens Prepaid Travel Card and the Sainsbury's Bank Multi-currency Cash Passport. The business banking service Holvi has also told customers that card transactions and ATM withdrawals on its Holvi Mastercard will not be processed.
We're continuing to check what other products are affected and will update this list in due course – if you know of one, please let us know at firstname.lastname@example.org.
Curve – a card you link to other debit or credit cards, allowing you to make payments which are then charged to those other accounts – was also affected initially, though it hasn't confirmed how many customers were impacted.
However, Curve says it has now brought its card and e-money issuing services in-house – it says this was long-planned, but it's now been implemented following the problems with Wirecard. So, as of Monday, customers can spend with their physical card as normal and it says Apple Pay, Google Pay and Samsung Pay should be available to use by the end of Monday.
What is the implication for those hit?
If you've got one of the cards which is still affected, then:
- If you have cash loaded to one of these accounts, you won't be able to access it at all.
- You won't be able to spend on the card at all.
- You won't be able to use your account to move money or pay bills, while planned direct debits will not be paid either. That has led to major worries from Pockit and Anna Money customers in particular, as many of them used their accounts for personal or business cash flow, so may not be able to pay rent, bills, suppliers and more.
- You won't be able to pay money into these accounts. If you or someone else tries to, it will bounce.
Is my money safe?
This is the big question, but we don't know for certain yet.
It should be safe if the correct procedures were followed. Wirecard is authorised under the Electronic Money Regulations 2011. Under these regulations, it's required to ring-fence any money you deposit in a bank account that's separate from its own cash. See our Digital Banking guide for more safety info.
However, such accounts are not protected under the official Financial Services Compensation Scheme like a standard current account or savings account.
We've repeatedly asked the FCA if it can guarantee affected customers' money is safe, ie, that the correct safeguarding procedures were followed by Wirecard and customers' money was indeed ring-fenced in a separate account. It told us: "We are not commenting further than the information that is currently on our website."
The FCA has not directly answered this issue on its website, so customers do not know for certain, though its latest statement says: "We cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns, for example, that all clients' money is safe".
Several brands have insisted their customers' cash is protected. For example, Pockit has said: "Your funds are being held by Wirecard in a ring-fenced designated account with Barclays. This means in the event of Wirecard going bust you are protected".
FairFX said: "We have just received written confirmation from Wirecard Card Services Ltd that all FairFX customer funds are held in safeguarded accounts with Barclays as per the FCA regulations that are in place specifically to protect customer funds."
I'm affected. What should I do?
We are still gathering full info from these firms and the FCA, but if you need to make a payment by plastic, you will need to use another card.
If you are unable to pay a bill because your money is frozen, then contact the firm you are due to pay to ask it for more time and to show forbearance. As this is a high-profile issue, most banks and utility firms should be aware of it.
If you receive payments from the Department for Work and Pensions (DWP) – such as universal credit or other benefits – into accounts held by one of the brands listed above, or have not been able to access your account since Friday 26 June, the DWP says you should call the enquiry line specific to the benefit or pension you receive. These numbers can be found at the top of any correspondence you have received from the DWP.
Also remember that, due to the coronavirus crisis, many banks are allowing you to take a payment holiday on credit cards, loans and other bills. See our Coronavirus Finance & Bills Help guide for more information.
The FCA also says some local authorities might also give loans to those suffering with finance problems because of the coronavirus pandemic. It notes:
- If you live in England, find your local welfare assistance team using this interactive map on the Children's Society website.
- If you live in Scotland, find out more about the Scottish Welfare Fund on the Scottish Government website.
- If you live in Wales, find out about the Discretionary Assistance Fund for Wales.
If you live in Northern Ireland, you might be eligible for finance support. Find out more on the nidirect website.
What happened with Wirecard?
The FCA is reacting to Wirecard's German parent company filing for insolvency after it revealed that around €1.9 billion (£1.7 billion) was missing from its accounts in an alleged accounting fraud. The FCA's taken the step to order Wirecard's UK arm to stop "all regulated activity".
What are customers saying?
Many customers of the affected brands voiced their frustration over the weekend, after being unable to access their cash. Here's what some said:
What do the companies say?
Pockit has been engaging with individual users on Twitter, telling them it's working with the FCA on a solution as quickly as possible.
Anna Money, in a statement on its website, said: "Your Anna card details and the money in your Anna account remain safe and secure – but unfortunately you cannot currently access them."
FairFX told us it's working with the FCA and Mastercard to get users "back up and running as soon as possible".
Wirecard said: "We fully understand the inconvenience the temporary suspension of our services has caused for our valued customers. We are in constant dialogue with the FCA and are working hard with them and our advisers to have the steps in place which will enable the suspension to be lifted so business can resume.
"The FCA has announced today that it has seen good progress from the firm in meeting the conditions that they set. We will provide further updates on our website as soon as we can."
Additional reporting by the Press Association.
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