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Travel agencies ‘strangled’ by Barclays threats: payments were withheld due to collapse fears

Travel agencies ‘strangled’ by Barclays threats: payments were withheld due to collapse fears

The travel industry has accused Barclays of “strangling” companies by demanding that they hand over millions of pounds if they collapse.

While the High Street giant has joined the government-backed emergency loan scheme to help businesses survive the pandemic, its Barclaycard division’s brutal approach has been exposed in a leaked letter.

It shows how the map giant threatened a major travel agent – employing around 450 people – that it would withhold all customer card payments unless it handed over nearly £ 10 million within 24 hours.

Mixed message: Barclays has joined the government-backed emergency loan scheme to help businesses survive the pandemic, but the Barclaycard division is taking a brutal approach

Mixed message: Barclays has joined the government-backed emergency loan scheme to help businesses survive the pandemic, but the Barclaycard division is taking a brutal approach

The tour operator, not wanting to be named for fear of scaring potential customers, said he received the ultimatum in a letter from Barclaycard informing him that he had stopped paying customer card payments a few days earlier because he thought it was about to collapse.

Stating the terms and conditions, it added: “We are asking you to pay an amount now … to cover your current and future obligations to us.”

According to chargeback rules, customers who pay more than £ 100 for goods or services on their card can reclaim it from the card company if they do not receive it. The travel agency boss, who has been a customer of Barclaycard for 21 years, said: “Barclaycard has behaved horribly.

They did not consult us and then asked for a ransom from a king of millions of pounds because they thought we would go bankrupt. Turning off card payments – this is like turning off the oxygen. They basically said we will bankrupt you unless you pay millions tomorrow. ‘

The Association of British Travel Agents (ABTA) said that companies across the travel industry have received similar ultimatums from banks as the Covid-19 pandemic devastated the tourist industry.

It has reported the behavior to the government and the City Watchdog, the Financial Conduct Authority.

John De Vial, ABTA’s chief financial protection officer, said: “This kind of silly action will kill companies. Banks are strangling companies that are trying to weather this crisis. ‘

A Barclays spokesperson said, “We are a major service provider in the travel industry and in some cases we are looking for additional security if travel is not delivered so that we can protect consumers if a refund is required.”

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