The impact on pre-paid card users was “minimal” when a provider’s services were suspended by the financial watchdog, according to Barnet Council.

Residents using pre-paid cards for council services lost access their accounts on June 26 after the Financial Conduct Authority (FCA) temporarily banned Wirecard from carrying on regulated activities.

It came after Wirecard’s German parent company was caught up in a financial scandal when it revealed €1.9 billion (£1.7 billion) was “missing” from its bank accounts. The firm has since filed for insolvency.

The FCA lifted its restrictions on the company’s UK operations on June 30, allowing card users to access their cash.

Barnet Council has used Wirecard since 2017 for some adults and family social services payments. In March 2019, council chiefs decided to switch to a new provider – but the transition is not yet complete.

When the decision to switch provider was made, 385 services users were using the pre-paid card. The council said the “low take-up” was mainly because “the product does not meet the council’s requirements and is not flexible enough to be used in all cases”.

A Barnet Council spokesperson said: “Prepaid card accounts were not accessible between June 26 to 30 while Wirecard’s services were under suspension from the Financial Conduct Authority. We had put in place a range of mitigations so the impact of this on users of our prepaid cards has been minimal.

“The pilot of our new provider’s pre-paid card service began with our adult social care department at the end of last year. The new contract is now also ready for family services to use, though the project has been paused during the Covid-19 lockdown.

“We continue as planned to transfer all family services cardholders to our new provider, PFS.”