In the UK thousands of Wirecard customers suddenly found themselves locked out of their online bank accounts, unable to pay for essentials. But how did a company in Germany losing nearly €2 billion stop people in the UK accessing their online bank accounts?
In the days preceding the scandal, there were accusations of financial irregularities and rumours that the firm CEO, Markus Braun, was about to be ousted. Here’s a timeline of the Wirecard woes.
Thursday, June 18
Following a routine inspection of its accounts, the Munich-based firm announced that €1.9 billion (£1.7 billion) had gone missing. As a result, their share prices fell by more than 60% as auditors Ernst and Young (EY) tried to establish where the money had gone.
Wirecard were unable to release it’s 2019 results meaning banks could terminate loans offered to them. The missing money accounted for one-quarter of their total balance sheet.
Friday, June 19
Markus Braun, who had run the company since 2002, resigns as its CEO. Share prices by this stage had dropped by 75%
Later, the company enlisted a US investment bank to devise a new financial strategy for Wirecard post-fallout.
There was still no update on the missing €1.9 billion
Saturday, June 20
It appeared that the missing billions might never have existed.
Authorities concluded the search for Wirecard’s money in the Philippines, where reports indicated it had been deposited. This was later denied by the country’s central bank who said the money had never entered their financial system.
The Philippine Central Bank is investigating the matter, while two other banks denied receiving the money.
Monday, June 22
The board of Wirecard admitted that the billions reported never existed. Since the scandal broke, their share price has plummeted by 85%.
Tuesday, June 23
Markus Braun surrendered after Munich issued a warrant for his arrest.
The former chief executive handed himself over to German authorities. Prosecutors alleged that Braun inflated the company’s finances to make it look healthier for investors.
Thursday, 25 June
Wirecard’s German parent company filed for insolvency after EY found evidence of ‘elaborate’ fraud.
The auditors reported that multiple parties around the world had given them false information, disguising fraud.
Friday, 26 June
The Wirecard scandal-hit UK online bank accounts.
Following the growth of the scandal in Germany, the UK’s Financial Conduct Authority (FCA) froze the licence of Wirecard Card Solutions, the company’s UK subsidiary. The freeze blocked all actions Wirecard usually carries out including supplying services to a long list of online bank account customers.
Wirecard supplied its services to companies like Pockit, Anna Money, Curve, Card One and Tuxedo, meaning that as the freeze remains in place thousands were locked out of their UK bank accounts.
This meant that until the matter got resolved customers were unable to use their own money. Some have taken to social media to voice their concerns, saying they are unable to pay bills, rent or even buy food.
What did this mean for Suits Me Customers?
Suits Me did not use Wirecard or its services meaning that anyone with a Suits Me account was able to proceed as normal. We have been unaffected by the Wirecard scandal and are here to help anyone who might have been affected with alternative banking solutions.
It takes only couple of minutes to open a new Suits Me account and funds can be moved into it as soon as the account is open.
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