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 in the day, the company hired a US investment bank to draft a new financial strategy for Wirecard to follow after the 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.
The search for Wirecard’s money ended in the Philippines, where the money reportedly ended up being 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 announced it was still investigating the matter whilst two other banks in the country said any claims they received the money were false.
Monday, June 22
The board of Wirecard acknowledged that the billions never existed as their share price decreases by a huge 85% since the scandal was first revealed.
Tuesday, June 23
Markus Braun turned himself in after a warrant for his arrest was issued in Munich.
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 said that they were given false information that disguised fraud involving multiple parties around the world.
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 supplies 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 means that until the matter is resolved customers are 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 does this Mean for Suits Me Customers?
Suits Me does not use Wirecard or its services meaning that anyone with a Suits Me account will be 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 10 minutes to open a new Suits Me account and funds can be moved into it as soon as the account is open.