Wirecard's missing $2 billion

AnotherJoe

I've looked down the back of my sofa, but nothing.

Zanderman

jonnygee2 said:

Client's money is supposed to be deposited in segregated trust accounts, which means it should be safe if the company goes bust.  However, Wirecard's auditor appears to be unable to confirm the balances of these accounts.

I think you have misunderstood the article. The missing money is from the businesses balance sheets - they have been declaring profits that didn't actually exist, causing an overvaluation. They are not, as far as can be told from this article, from customer deposits which are not part of a banks operational profit.

That's my understanding too.  Mrs Z-man had a Thomas Cook Cash Passport Card issued via Wirecard with some Euros on it..  She rang Mastercard's pre-paid card number yesterday (0800 023 2098), told them she wanted to cash it all in, went through the security questions and they said it would be in her bank account, minus currency exchange charges, in a few days.  No suggestion at all that the money might be lost.

London7766551

https://www.fca.org.uk/news/news-stories/requirements-imposed-wirecard-authorisation

Apparently this means customer money is frozen!

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

• must not carry on any regulated activities

• must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.

https://twitter.com/paullewismoney/status/1275404227800637441

SnowTiger

Zanderman said:

jonnygee2 said:

Client's money is supposed to be deposited in segregated trust accounts, which means it should be safe if the company goes bust.  However, Wirecard's auditor appears to be unable to confirm the balances of these accounts.

I think you have misunderstood the article. The missing money is from the businesses balance sheets - they have been declaring profits that didn't actually exist, causing an overvaluation. They are not, as far as can be told from this article, from customer deposits which are not part of a banks operational profit.

That's my understanding too.  Mrs Z-man had a Thomas Cook Cash Passport Card issued via Wirecard with some Euros on it..  She rang Mastercard's pre-paid card number yesterday (0800 023 2098), told them she wanted to cash it all in, went through the security questions and they said it would be in her bank account, minus currency exchange charges, in a few days.  No suggestion at all that the money might be lost.

Fair enough.

Email (sent at 11.50am) from ANNA, a prepaid business card/account: 

We are urgently recommending you withdraw your money from your ANNA account before 12pm today. This is due to the FCA placing requirements on our UK payment provider.

 

If possible, withdraw your money with your ANNA card. If this isn't possible try to withdraw funds using FPS.

robot1000

The Curve card has now been suspended

epm-84

robot1000 said:

The Curve card has now been suspended

Yes.  They say they expect to be up and running again soon with a replacement provider.

epm-84

dahj said:

Guess it highlights to keep balances to a minimum on these e-money institution backed cards   

As things stand I don't know why you need a pre-paid card.  A Starling bank account without an overdraft currently offers fee free foreign currency transactions and cash withdrawals, as does the Virgin Money bank account plus they have advantages which a card does not, like the ability to pay in a cheque via the app in the case of Starling.

inspectorperez

London7766551 said:

https://www.fca.org.uk/news/news-stories/requirements-imposed-wirecard-authorisation

Apparently this means customer money is frozen!

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

• must not carry on any regulated activities

• must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.

https://twitter.com/paullewismoney/status/1275404227800637441

Just noticed that Travelex are mentioned right at the bottom of the list.

They were victims of a ransomeware attack in December 2019/January 2020 and their systems were offline for weeks. Just wondering if that situation is in any way connected with the missing funds now being reported.

Funny that the company's 31 December 2018 accounts were signed off by EY at the beginning of last month with a "clean" audit report!!

Managed to redeem my own money fortunately as the situation in January did not pass my own "sniff" test" 😃

jonnygee2

Funny that the company's 31 December 2018 accounts were signed off by EY at the beginning of last month with a "clean" audit report!!

Yep, once again the auditors will have some huge questions to answer because of this. Still, 'independent' auditor reports are a farce these days.

inspectorperez

jonnygee2 said:

Funny that the company's 31 December 2018 accounts were signed off by EY at the beginning of last month with a "clean" audit report!!

Yep, once again the auditors will have some huge questions to answer because of this. Still, 'independent' auditor reports are a farce these days.

As an ex now retired auditor, I sadly have to agree with you!!