Barclaycard has cancelled hundreds of cheques sent to its secured loan customers after a system error left them at risk of fraud.

The bank, which in July announced plans to can its secured loan lender FirstPlus, has admitted that, due to a system error, the wrong details were entered onto cheques and sent out to customers. As a result, it has cancelled all cheques issued to customers between 14 and 18 July.

The incident has left its FirstPlus loans department battling with a backlog of applications. The lender will close to new business from 8 August, and as a result it is already under pressure to process applications from customers keen to get a loan before it shuts its doors.

Barclaycard says it has tried to contact affected customers by phone, and it also sending out letters explaining the situation. It has also send out replacement cheques, and says it will cover any direct costs that customers incur as a result of its mistake.

A spokeswoman for Barclaycard says around 350 customers were sent incorrect cheques. 

She adds: "Since identifying the problem, we have made changes to our systems and introduced additional checks to ensure that there is no reoccurrence. 

"We apologise unreservedly to all our affected customers for any inconvenience or distress that has been caused.  We will be sympathetic to customers who have suffered financially as a direct result of this problem."
 

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