It seems that the power of Vanquis cannot match that of the Financial Conduct Authority (FCA), who have ordered the credit card company to refund £169 million to 1.2 million customers.
The FCA has stated that the company failed to properly disclose the cost of a credit card add-on product called ‘Repayment Option Plan’ (ROP).
The Vanquis add-on was intended to enable customers to manage their account by freezing it, taking payment holidays, and receiving text alerts.
When the FCA examined sales calls concerning the product however, they found that Vanquis failed to inform customers of the true product cost, not making it clear that interest would be charged on top of the fee. This happened in 100 per cent of the sales calls monitored.
It has been confirmed that all 1.2 million customers who had the add-on between June 2003 and March 2014 will receive a refund.
In addition to the mass refund, the FCA has fined Vanquis to the tune of £2 million.
Vanquis will be contacting all affected customers. However, any customers that may have moved since they had the credit card should contact them to ensure that the correct contact details are held.
Director of enforcement and market oversight at the FCA, Mark Steward, said: ‘Vanquis failed to make sure customers were informed about the full cost of the ROP when it was offered to customers.
‘Most Vanquis customers chose the ROP to help manage their credit without realising instead that the product might lead to their indebtedness increasing. Customers are entitled to be told all relevant information when being offered financial products. These were very serious breaches.
‘Vanquis has decided now to do the right thing by acknowledging the wrong-doing and offering to compensate its customers. We are pleased the firm has extended the compensation to customers who purchased the ROP before we took responsibility for regulating the consumer credit market.’
Vanquis have issued a statement saying: ‘Our aim now is to put things right as quickly as we can by refunding the interest element of ROP to customers.
‘In total, this will affect around 1.2 million customers dating back to 2003, with the total amount refunded to customers amounting to around £168 million. In most cases, existing customers will receive a credit on their account. Alternatively, past customers who are no longer with us may receive a cheque.
‘Customers due a refund do not need to do anything to initiate the process. Vanquis will take all the necessary steps to proactively contact customers and will work to process refunds as quickly as possible.’