ePayments suspend all activity on its customer accounts due to FCA review

Alex Alex 11 February 2020
ePayments suspend all activity on its customer accounts due to FCA review

Payment processing company ePayments suspended all financial activity due to review by FCA. This is official message from company:

On the February 11, 2020 ePayment Systems Limited ('ePayments') agreed with the Financial Conduct Authority ('FCA') to suspend all activity on its customer accounts. This decision was taken following a review, by the FCA, of ePayments anti-money laundering systems and controls, which identified weakness that required remediation. We know this will be a very frustrating time for our customers. We apologise for any inconvenience caused and are working tirelessly with the FCA to ensure improvements are made and accounts can be reactivated as soon as possible. During this improvement process, we want to assure customers that their funds are being safeguarded as normal.

Also, information from ePayments twitter account:

And information from the email that was sent to customers

We write to inform you that in accordance with paragraph 12.1 (j) of our standard terms and conditions, we have unfortunately taken the hard decision to suspend activity on customer accounts, effective from today. During the course of this suspension customers will be unable to transfer, deal, withdraw or deposit funds and will be unable to use their ePayments cards.

Following a review by the Financial Conduct Authority ('FCA') of ePayments Systems Limited's ('ePayments') anti-money laundering systems and controls, a number of weaknesses have been identified which require urgent remediation to ensure that our customers can enjoy a safe and secure platform.

Following discussions with the FCA, ePayments has agreed to suspend activity on customer accounts until remedial action has been undertaken to the satisfaction of the FCA.

We know this will be a very frustrating time for our customers. We apologise for any inconvenience caused and are working tirelessly with the FCA to ensure improvements are made and accounts can be reactivated as soon as possible.

During this improvement process, we want to assure customers that their funds are being safeguarded as normal.

Should you have any questions in connection with this letter please contact [email protected]

This is all we know by now. We will update you if I get any new information

Update on 14 Feb. 2020

ePayments created FAQ for customers with most common questions

Update on 17 Feb. 2020

ePayments published more FAQs for customers.

Update on 18 Feb. 2020

FCA have answered about situation with ePayments

Thank you for contacting the Financial Conduct Authority (FCA).

I understand that you’ve contacted us today in relation to ePayments Systems Limited. You’ve stated that you have an account with the firm and that the account has been blocked. I can appreciate how difficult and alarming this matter must be for you. Please see below for guidance.

What we do

 I thought it’d be useful for me to give you an overview of our remit and what we do. We’re responsible for regulating firms in the UK who provide financial services and products in relation to regulated activities (the term we give to the business we allow a firm to do) with regards to their conduct. We’re tasked with regulating the UK financial markets and to do this we must remain impartial. This means we are unable to investigate or intervene in individual matters and we don’t have dispute resolution powers for individual complaints. Although we don’t have the resolution powers for individual complaints, what I can do is let you know where we are at with ePayments Systems Limited.

ePayments Systems Limited

I’ve conducted a search of our financial services register (a database of all the firms/individuals we authorise) and can confirm that ePayments Systems Limited is an authorised Electronic Money Institution firm. This means the firm have been given specific permissions in order to provide financial services/products within the United Kingdom.

I can see from the register that the firm have permissions to issue electronic money. You can access this information on our register by following this link. Please be aware that if you wish to conduct business with the firm or make a complaint about the firm, I’d strongly suggest contacting ePayments Systems Limited using the details we hold on our register.

This is to make sure that you’re dealing with the legitimate firm as sometimes individuals use details of firm found on our register to suggest they work for the genuine firm. We call this a cloned firm and typically it’s part of a scam.

 Why did the FCA take this action now?

It is within the FCA’s power to take supervisory action in certain cases where there may be harm and it is desirable to protect the interests of customers. Following supervisory discussions and concerns identified around the firm’s financial crime controls, Epayments submitted a voluntary application for the imposition of a requirements. As a result, the full requirements have been published on the FCA register which you can find here.

Although these requirements are in place, Epayments continues to be regulated by the FCA. Epayments must apply to the FCA to remove those requirements once it can satisfy the FCA that the concerns around its financial crime controls have been remediated.

What should I do if I have money with Epayments?

Customers should contact the Epayments directly if they are concerned, have questions or for any updates.

What is safeguarding?

Safeguarding is a key consumer protection measure within the Electronic Money Regulations (EMRs) and Payments Services Regulations (PSRs). The purpose of safeguarding is, to protect customer money if a firm fails.

Safeguarding requires firms to protect customers’ funds received in exchange for e-money or payment services, by either holding it separately from all other money held by the firm in an appropriate account, or by having an insurance policy/comparable guarantee covering the value of customer funds that would pay out if a firm enters insolvency.

A firm’s ability to effectively safeguard customers’ funds is critical to help ensure that customers’ money is protected if a firm fails.

These safeguarding requirements applied to Epayments and were a condition of Epayments authorisation.

Are my funds protected by FSCS?

No. The Financial Services Compensation Scheme (FSCS) only applies to certain types of activity. This does not include issuing electronic money or payment services.

Under the EMRs and PSRs, there are rules on how customers’ money should be protected and these requirements are known as ‘safeguarding’.

What happens next?

We are working with the firm on their remediation plan to address the deficiencies identified. Epayments must apply to the FCA to remove those requirements once it can satisfy the FCA that the concerns around its financial crime controls have been remediated.

The above information is all we can share with you at the moment as we must remain impartial. You may wish to contact the firm directly to let them know that the funds in your account are for an operation. They may be able to provide you with guidance in this matter. I hope this information has been of use to you. If you have any further queries please don’t hesitate to contact us by replying directly to this email.

Group in Telegram with discussion of  this matter @epaymentsstatus or you can read this chat archive here

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