Customers locked out of accounts at Pockit, Curve and other prepaid cards - MSE News

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  • jbryce
    jbryce Posts: 55 Forumite
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    Is my money safe?
    It should be – even if you're unable to access it at the moment. 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.


    But isn't the "ring fenced" money the money that's missing?

    As I understand it, not exactly.

    My understanding of it (and I may be wrong) is not that customers ringfenced money has vanished, but that they have overstated, to the tune of  €1.9bn, the amount of ringfenced money they have. This was presumably done with the intention of making the company look like they're doing a lot better/are a lot bigger than they actually are to draw in investors.  So the genuine customer deposits should still be safe, but getting access to them is going to be a problem for the time being.
    Ringfenced money should be exactly equal to customer balances. If the balance was higher, that would mean they have their own money in the ring fenced accounts and therefore they are not keeping customer funds and their own funds separate.
  • ozaz
    ozaz Posts: 315 Forumite
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    ozaz said:
    From the article:
    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
    But does the FCA (or some other body) actually check emoney firms are following correct procedures?
    If so, how often do checks take place?


    BaFin is the regulator in Germany, it launched a criminal complaint about two Financial Times journalists who had the temerity to suggest that something wasn't right at Wirecard.
    Then of course there is the auditor EY who said "there seems to be something wrong", which makes a change because for the last four years they've taken Wirecard's word for it that the right money was in the right place.

    How about providers regulated by the FCA?
    Does the FCA routinely check ring-fencing is being done properly or does it just take a look if there are complaints/concerns? 


  • colsten
    colsten Posts: 17,597 Forumite
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    Dr_Crypto said:
    I’ve never seen the appeal of these new payment methods. I’ll stick to a normal bank and know my money is safe. What is advantage of using these services? 
    No credit checks or Government issued photo IDs required to open an account. Saves the hassle and cost of applying for a passport in order to prove your identity
    No need to have a Government-issued passport to prove identity to high street banks and building societies either..
    That's contrary to the information they provide on their websites. Can you provide an example of a high street bank not requiring either a passport or driver's license?
    I have currently got 32 UK current accounts, with all sorts of banks (+Nationwide BS). All applied for online, none has ever asked to see any photo-ID. 

    Although I appreciate that any of them could ask me to verify my ID by showing a photo ID (in branch or online), and if you apply in Branch (where this is still offered), you may also be asked for ID. In the main, however, identification happens electronically. If they cannot find you in the usual places (credit files, electoral register etc), you will, of course, be asked to provide the traditional photo ID.
  • colsten
    colsten Posts: 17,597 Forumite
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    edited 27 June 2020 at 6:01PM
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    Dr_Crypto said:
    I’ve never seen the appeal of these new payment methods. I’ll stick to a normal bank and know my money is safe. What is advantage of using these services? 
    No credit checks or Government issued photo IDs required to open an account. Saves the hassle and cost of applying for a passport in order to prove your identity

     I applied for a CurrencyFair account only last week (as they had a cashback offer). Part of their account opening procedure is that you upload photo ID, preferably a passport. Whilst they don't offer current-account-type services, they have (had) a pre-paid debit card are which used the Wirecard infrastructure.

    I don't think it is safe to assume that you would never need a photo ID if you use one of these alternative payment methods. Specifically if there are any issues with one of those cards, you may get asked for ID and you wouldn't always be able to resolve your issue without providing such ID.
  • Kirky9999
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    I have a Fair FX card with dollars I bought before the rate went down stored on it.  Doubt I will see that money again as I doubt they followed the guidelines when scamming over 1 billion.  Shame I can’t go after Fair FX for not looking after the money.  Just what we need right now 
  • ceremony
    ceremony Posts: 241 Forumite
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    colsten said:
    ceremony said:
     When I'm travelling I leave my real bank cards at home and take the Curve card. I then use the Curve mobile app to choose which card I want to spend money on. It means that if I lose my wallet I've only lost one card and it's easy to deactivate. The money is still in my real bank, Wirecard isn't touching it.

    Slightly off-topic: it seems an overly risky approach to take just 1 card with you when travelling, or even when going to your local shops or pubs etc. I do use Curve myself but there is no way I would rely 100% on it (or any other card). On a day like today, you would be left high and dry, even if you still have your Curve card  B)

    I take my phone as well, which has Google Pay set up on it. That means I'm usually covered for contactless since I have "two different cards", and can use the Curve in places where contactless isn't working / if I need to go to an ATM. I usually carry a small amount of cash too.  I just leave my 'real bank cards' at home.

    Start Debt Jun 2020 = £10,036 - Current £5,894 | #324 £1,000 Emergency Fund Member - £205
  • jamielutz1987
    jamielutz1987 Posts: 304 Forumite
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    edited 28 June 2020 at 1:48PM
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    ozaz said:
    ozaz said:
    From the article:
    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
    But does the FCA (or some other body) actually check emoney firms are following correct procedures?
    If so, how often do checks take place?
    BaFin is the regulator in Germany, it launched a criminal complaint about two Financial Times journalists who had the temerity to suggest that something wasn't right at Wirecard.
    Then of course there is the auditor EY who said "there seems to be something wrong", which makes a change because for the last four years they've taken Wirecard's word for it that the right money was in the right place.
    How about providers regulated by the FCA?
    Does the FCA routinely check ring-fencing is being done properly or does it just take a look if there are complaints/concerns?
    Unfortunately, ring-fencing is a nice word but not always that easy to implement. Lendy (the P2P platform that went under last year) was found to have not implemented ring-fencing as they should have.
    RSM, the administrators, discovered that a large amount of loans that were believed to be safely locked in to be paid back to investors could instead go to insolvency practitioners and creditors.
    So when you read this in the T&Cs of P2P platforms, take it with a huge dose of salt as that's what the poor Lendy investors were relying on.
    "In the unlikely event that XYZ enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be ring-fenced and, therefore, cannot be used by the administrators to settle any debts due by XYZ. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions."

  • whichman2
    whichman2 Posts: 9 Forumite
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    The accounts of FairFX Plc , as a matter of public record, will now be under as much scrutiny by customers as Wirecard I would imagine. I found this in the FAIRFX PLC ANNUAL REPORT & FINANCIAL STATEMENTS YEAR ENDING 31 DECEMBER 2018 which made me laugh a bit.

    “During the year, the Directors received legal advice in connection with the risks and rewards to the Company that arise from the holding of customer money and has concluded that the risks and rewards are principally vested with the customers. As a result, the company no longer accounts for customer cash in the Company’s financial statements .”

    Well Yes apparently that is correct!
  • explorer31
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    At the moment today 27th June, the Transferwise pre paid card + App is okay.
    I know this is FCA covered, but should i be concerned about this ( Wirecard solutions Ltd issue ) ?
  • badger09
    badger09 Posts: 11,247 Forumite
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    At the moment today 27th June, the Transferwise pre paid card + App is okay.
    I know this is FCA covered, but should i be concerned about this ( Wirecard solutions Ltd issue ) ?
    Sorry, can't answer your question, but you seem to have lost a day :o
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