An incredible 1.2 million credit card users will be refunded hundreds in compensation by a major credit card provider.
As reported by The Mirror, anyone with a Vanquis credit card from 2003 to 2014 could be in line for their share of an astounding £168,781,000 refund.
That huge amount will be refunded to 1.2 million current and former customers, which works out at an average of £140 each, although the amount you get will vary depending on how much interest you were charged.
The move comes after Vanquis was fined almost £2million by the Financial Conduct Authority for failing to mention it charged interest on its Repayment Option Plan (ROP) service.
Mark Steward, director of enforcement at the FCA, 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 launched ROP around June 2003. For £1.29 a month for each £100 of borrowing it gave customers flexibility in their repayments, including a two-year repayment freeze if you lost your job, became ill, took maternity or paternity leave and more.
Vanquis offered the service to customers when they called to activate their credit card but the problem was they didn’t mention that interest was charged on the £1.29 fee.
Vanquis has now agreed to pay this interest back to all ROP customers from June 2003 to 31 March 2014.
In a statement to customers, Vanquis said: “We accept that we have not been clear enough in the past and we should have done better for our customers for which we apologise.
“What’s important to us now is that we put things right. We will proactively refund all customers that have been affected.”
Customers eligible to receive refunds will fall into one of four categories:
1. Customers with open Vanquis accounts.
2. Customers with closed Vanquis accounts. These accounts will either be in good order (ie no debt is owed to Vanquis) or be closed and settled between Vanquis and the customer.
3. Third party managed accounts, held within Vanquis. These customers are not maintaining their credit agreements and have entered into some sort of debt arrangement with a third party overseeing the arrangement.
4. Customers whose debt has been sold to a third party such as a debt collection agency.
If you still have a Vanquis card, the money will most likely be added straight into your account.
For people who no longer have an active card, Vanquis will write to you or contact you on the most recent phone number they have.
You can find out more information on their ROP page.
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