Despite it being illegal to withhold customer funds in the UK, Barclays sticks to its line and will not allow new customers to withdraw funds or make transfers, putting every possible obstacle in the way.

Every professional within every sector of the non-bank electronic trading industry is fully aware that one of the most important matters with regard to operating a legal and compliant business, as well as maintaining a good and transparent reputation is that surrounding the handling of customer funds.

Over the years, it has been made patently clear by regulatory authorities around the world that the refusal of withdrawals, and intentional obstacles which are put in place to prevent withdrawal of customer funds is absolutely not acceptable.

FX and CFD firms in major financial centers have occasionally been on the receiving end of extremely harsh regulatory censuring for preventing withdrawal, often with reputation damaging consequences and large fines.

Today, FinanceFeeds discovered that what is not allowed for most, is standard practice within Tier 1 banks, which once again are allowed to break the law with little consequence.

Barclays, one of the worlds largest Tier 1 FX liquidity providers by market share a market share that is rapidly shrinking due to the BARX single dealer platforms odious adherence to last look execution practice and continual rejection of fills which has led to non-bank market making specialists such as XTX Markets and Citadel Securities taking the pole positions, has been engaging in the illegal practice of withholding client funds on its standard retail banking accounts.

In fact, more specifically, Barclays does not allow the withdrawal of funds for new account holders, yet allows them to deposit funds when opening an account online, a practice which landed Plus500 in regulatory trouble with the Financial Conduct Authority (FCA), decimating the companys share price and freezing all activity.

However, Barclays are allowed to carry out this practice.

It has come to light that new retail banking customers are able to open bank accounts with Barclays via the companys website, and complete the compliance and identification requirements via uploading a photographic copy of a passport, and then using a smartphone camera to take a selfie and a video to ensure that these match.

Within seconds, a bank account is open and live, and as much money as a client wishes can be deposited.

There is no mention whatsoever in Barclays terms and conditions that once deposited, a withdrawal would not be possible, nor a transfer into any other bank account until Barclays satisfies some reactionary verification criteria, which the bank will not tell customers what that is.

Over the past week, Barclays bank branches across London have been closed, despite the information on the companys website, and despite the telephone customer services team advising clients that they can go to a branch to perform a withdrawal or transfer during the early stages of holding a bank account.

It has been made clear to FinanceFeeds that many new Barclays customers are being sent to branches only to find that the branches are closed, with notices on the doors saying that they are unable to open due to unforeseen circumstances and no information on reopening is forthcoming.

Bearing in mind that Barclays closed its entire European branch network recently, this does not bode well.

FinanceFeeds has investigated this in detail, and has also found that customer service departments of Barclays are unable to facilitate withdrawals or transfers via the telephone, and that the app is locked down in terms of making transfers to other accounts until further verification has taken place.

Users of the app will note that they will not be able to access their money, and that no withdrawals are able to take place, no transfers can take place and attempts to add new payees is met with a message that says coming soon and that clients will have to wait four days from opening an account until they can make the transfer.

FinanceFeeds is aware of a case in which a client paid 9,810 GBP into a new account which was opened online on Friday, December 18, 2020, and is still unable to access funds, unable to withdraw any funds and unable to make transfers today, four days later, with the message still displayed. Various calls to customer services result in being read the same nonsense from a script, and refusal to be transferred to anyone senior.

FinanceFeeds contacted several members of staff at Barclays to investigate this, one of which spoke at length, repeating a corporate line that this is standard procedure.

We made it clear that refusal of withdrawals is a criminal offense, and that under British law, liners of financial institutions should be able to access their money at all times, however the bank continued to hold its line that it is able to establish accounts online, accept customer deposits and then not facilitate withdrawals until further notice or until a customer receives a bank card, which could be after the holidays now.

Of course, customers in the United Kingdom are protected up to 85000 under the Financial Services Compensation Scheme (FSCS) if they are the victim of a bucket shop or Ponzi scheme, or if withdrawals are blocked by a nefarious financial institution, however for customers depositing more than that, a risk is being taken, plus for those depositing less, an FSCS claim may take longer than is practical to wait.

It is clear that banks in the UK can get away with whatever they like, including committing withdrawal fraud, whereas non-bank financial services firms and OTC derivatives companies have to keep a clean copybook.

One rule for one, another for others. The old boys clubs of the Prudential Regulatory Authority and the Financial Conduct Authority favoring the banks.

FinanceFeeds has full documented evidence of this, and for those in the same situation wishing to go down the class action route, we would be happy to assist.

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Barclays Bank refusing withdrawals to new customers - and getting away with it - FinanceFeeds