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Compensation from Vanquis

Are you affected by the announcement by the FCA?

What does the Vanquis compensation mean for my debt solution?

The Financial Conduct Authority (FCA) has announced that credit card lender Vanquis must pay compensation to eligible customers for failing to disclose the full cost of an add-on product, Repayment Option Plan (ROP).

Vanquis has agreed to refund approximately £169 million to affected customers. This accounts for the interest charged on ROP from 1 April 2014 until late 2016 when customers were told about the extra charges.

ROP was an optional service, similar to an insurance, which allowed Vanquis customers in financial difficulties to take a payment break without their credit file being affected.

Vanquis didn’t make it clear to their customers that the payments for ROP were treated as purchases on the card so interest was added to them each month at the rate of up to 79.9% APR.

I think I’m entitled to compensation, what should I do?

You don’t need to take any action. Vanquis will directly contact everyone affected.

If you still have an outstanding debt to Vanquis, it’s possible they may deduct the ROP refund from the balance you owe them rather than sending you the money. Vanquis have not yet confirmed this. If you have paid off your Vanquis debt, a refund should be sent to you, most likely as a cheque.

There’s no need to use a claims management company to chase any refunds.

More information can be found on the FCA website.

I’m a StepChange Debt Charity client and I think I’m affected, what do I do?

If you’re on a DMP (debt management plan) or TPP (token payment plan)

The amounts being paid by Vanquis are likely to vary. If you’re unsure about how any payment you’ve received may affect your plan, get in touch with us for advice on how to use it. This will depend on your individual situation and the debts you have left to pay.

If you’re on a DRO (debt relief order)

If you receive a refund from Vanquis and you’re on a DRO, you must let the Insolvency Service DRO team know within 14 days of receiving the money.

As long as the amount of money you get is under £1,000 and accounts for less than 50% of your total debt, your DRO won’t be revoked.

If your 12-month DRO moratorium has ended, you don’t need to tell anyone about the refund.

If you’re on an IVA (individual voluntary arrangement) or trust deed

If you’re on an IVA or Trust Deed and receive a refund, you’ll have to let your trustee know. If the refund you get is a small amount of money, you’ll be allowed to keep it. Larger payments (usually over £500) will have to be paid to your trustee to be put into your IVA/trust deed.

If you’re bankrupt

You have to declare it to your OR (official receiver) or AiB (Accountant in Bankruptcy), and you may have to pay the money to them.