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Wirecard UK can resume regulated activity

On 29 June 2020, the FCA provided written consent to allow Wirecard to resume issuing e-money and providing payment services. The restriction on activities will lift at 00.01 on 30 June 2020 (GMT).

The primary objective of these requirements was to protect the electronic money funds of consumers in safeguarded accounts.  It also had the effect of preventing consumers from withdrawing and making payments with those funds.  The FCA’s consent means that Wirecard can now resume electronic money and payment services to its customers and customers can now, or very shortly, use their cards as usual.

What happened to Wirecard?

On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm must not dispose of any assets or funds, that it must not carry on any regulated activities and that it must set out a statement on its website that it is no longer permitted to conduct any regulated activities. This follows ongoing events in Germany concerning Wirecard’s parent company, Wirecard AG. Wirecard AG is not supervised by the FCA.

The FCA has been working closely with Wirecard and other authorities to ensure that the firm was able to meet the conditions required to lift certain requirements that we imposed on it. We know that some customers have faced difficulties over the weekend but the steps we took were the right ones to protect everyone’s money.  Our primary objective has always been to protect the interests and money of consumers who use Wirecard. We have worked with Department of Work and Pensions (DWP), Her Majesty’s Treasury (HMT) and the Home Office over the weekend in order to help any customers suffering financial distress and directed people to that support on our website.

We are now in a position to allow Wirecard to resume regulated activity and on 29 June 2020, the FCA provided written consent to Wirecard to resume issuing e-money and providing payment services. 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.

What requirements remain in place on Wirecard?

There continue to be certain requirements in place which have been imposed on Wirecard’s authorisation. These requirements include restrictions over where it can hold customer monies and restrictions over its ability to transfer its own assets.

The FCA continues to work with the firm to progress these matters.

What should I do if I have e-money with Wirecard, use Wirecard to make payments or my prepaid card has stopped working? Who do I contact?

Customers should now or very shortly be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

Customers can also contact our Consumer Helpline for further information.

What should I do if I gave money to an agent of Wirecard?

E-money firms like Wirecard may provide payment services through agents. An agent is any person (this can be an individual or a company) who provides payment services on behalf of an e-money firm. E-money firms may also appoint distributors to distribute or redeem e-money but distributors cannot provide payment services. Unlike agents, there is no requirement to register distributors. Agents are registered by the FCA and published to the FCA’s Register. Where e-money firms appoint agents or distributors they are responsible for their activities.

Customers should now, or very shortly, be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

What should I do if I gave money to an agent of Wirecard which is based in another EEA country?

An authorised e-money firm, like Wirecard, may provide payment services or e-money activities in another European Economic Area (EEA) country. This is called ‘passporting’. Passporting is when a business carries on activities and services regulated under EU law in another EEA country on the basis of authorisation or registration in its home country. The activities may be carried out in the host country using a branch or a local agent / distributor or, on a cross-border services basis without a physical presence in the host country for example, a website.

Customers should now or very shortly be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

The account where I receive my benefit payments has been frozen, what do I do?

Customers should now or very shortly be able to use their cards as usual. The FCA has been working with the Department of Work and Pensions (DWP) to arrange help for affected consumers. If you are still experiencing difficulties, please refer to the DWP for support.

Are my funds protected by FSCS?

No. The Financial Services Compensation Scheme (FSCS) only applies to certain types of activity which does not include issuing electronic money or payment services.

Under the EMRs and PSRs, there are rules on how customers’ money should be protected and these requirements are known as ‘safeguarding’.

Is there a chance I won’t get my money back? What is safeguarding?

Safeguarding is a key consumer protection measure within the Electronic Money Regulations 2011 and the Payment Services Regulations 2017 which are the rules setting how e-money and payments firms should conduct their businesses. The purpose of safeguarding is to protect and return customer money if a firm was to fail.

Wirecard is required under the EMRs to maintain appropriate measures to safeguard customers’ money. It does this by holding it separate from its own money in accounts with banks (or another credit institution). Effective safeguarding arrangements are critical to help ensure that customers’ money is protected and returned if a firm fails. Adequate safeguarding arrangements which are compliant with the regulatory requirements are a condition of Wirecard’s ongoing FCA authorisation.

What should I do if I am a firm who outsources some operational functions to Wirecard?

Firms should contact Wirecard directly to discuss the recommencement of any activities. Firms may also contact their relevant Supervision contact and we have a dedicated Customer Contact Centre to give your firm a direct point of contact: Firm.Queries@fca.org.uk.

To note, we are currently consulting on new requirements on the firms we supervise to help strengthen their operational resilience including, the implications for operational resilience for firms using outsourcing and other third-party service providers. Find out more information. We would also draw your attention to the EBA Guidelines on Outsourcing Arrangements which apply to e-money and payment firms.

What happens next?

There continues to be requirements imposed on Wirecard’s authorisation and these are published on the FCA’s Register.  The FCA continues to work with the firm to progress these matters.

If you think you have been scammed

Be aware that fraudsters look for opportunities like these to target customers. If you have any concerns at all about a potential scam, contact us immediately.

You can report the firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or by using our reporting form.

You should also contact Action Fraud online or by calling 0300 123 2040.

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