Debt Camel

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Vanquis ROP refunds – they look too low – what is happening?

People are starting to get refunds from Vanquis for the extra interest they paid if they had the Repayment Option Plan (ROP). That’s the good news.

But the refunds are being paid very slowly.

In June, Vanquis gave up its three-month target and said it hoped to refund people with open accounts by the end of the summer.

UPDATE  That didn’t go well. In October people were then being told Vanquis hoped to have refunded everyone bu the end of thd of February 2019!

And even worse some of the amounts being refunded seem lower than had been expected. This is the first article in a series looking at this problem.

The second article is  Vanquis ROP – over limit charges not included. This doesn’t explain why the refunds amounts are so low for most people, but if you had over-limit charges, that article explains how to ask Vanquis to refund them.

The third article is Vanquis the refunds are wrong – how to complain. That was written when Vanquis had at last given some details about their calculation. It has a template letter for you to use to complain.

A typical refund email

The emails I have seen look like this:

email offering a refund from Vanquis

It says:

We could have done a better job explaining the way interest was charged in relation to your ROP.

You are entitled to a refund of £x.

You don’t need to do anything – We have agreed with the FCA to make refunds by reducing outstanding balances where possible. Therefore, we have credited your account with £x. This will be shown on [your next statement] as ‘ROP Interest Refund’.

We are writing to you about the recent investigation by the Financial Conduct Authority (‘FCA’) into ROP. We agree with the FCA’s conclusion that we were not clear, during the call where you opted-in to the product, that charges for the Plan attracted interest at your purchase interest rate. We could have done more to ensure you understood the interest charges on ROP, for which we apologise.

You are entitled to a refund of interest relating to ROP from when you were first charged for ROP up until 08/12/2016 This is 30 days after our letter of 07/11/2016, which provided details of the Plan including how interest applies. We have agreed this and the method of calculating the refund with the FCA (under its statutory powers).

What the FCA ordered

In February, the FCA said:

The FCA has ordered Vanquis to pay back the interest customers were charged on the ROP … to when customers were informed of the full cost of the ROP. 

So customers aren’t getting a refund of the ROP itself – they are getting a refund of the interest they were charged on the ROP, because this interest was never properly explained to them when they agreed to take the ROP.

Vanquis wrote to customers with ROP in 2016/7 saying how much it had cost them in the previous year. Some people cancelled the ROP at that point. If a customer didn’t cancel, it is assumed they were happy with the cost and so they won’t get a refund of the interest added on for the ROP payments after this letter.

How much should these refunds be?

The purpose of this refund is to put someone back in the situation they would have been if they had been charged the ROP but no additional interest had been added.

The refund calculations are complicated. They depend on how much ROP was charged, what interest rate the customer was paying on their Vanquis card and, crucially, how often (if ever) they cleared all or most of their card balance. Clearing a card balance will have stopped compound interest continuing to accrue on the previous ROP charges, instead 8% statutory simple interest should be added from this point. But compound interest starts accruing on later ROP payments until the balance is again cleared.

I asked Vanquis on June 18th to explain how they think the refunds would be calculated in a couple of simple cases, but so far I haven’t received an answer.

Previous ROP refunds

We already have some real-life examples of the way the extra interest added can be large.

Since last August, many people have complained to Vanquis saying they were mis-sold the ROP. Where these complaints have been upheld, either by Vanquis themselves or by the Financial Ombudsman, Vanquis has refunded an amount made up of the ROP payments plus the extra interest charged plus 8% simple interest where a balance had been cleared.

Here are two examples:

Nathan 22 March had a maxed out balance of £2250 on the card which was taken out on 11/2/14.
Refund was ROP fees £785.94 + associated Interest £1064.92 + simple 8% £21.56
Sarah April 28th took the card out May 2013 and closed it last April 2017. Her credit card limit was £500 and she only ever paid the monthly minimum:
Refund was ROP fees £188.25 + associated interest £362.28 + simple 8% interest £91.68

The FCA-ordered refunds will be lower than these “full” refunds because customers won’t get the ROP fees back. And they won’t get a refund for the extra interest caused by any ROP they paid after they had received the Vanquis letter telling them the true cost of the ROP.

However, these “full” refunds do show that the interest paymentsresulting from the ROP can often be very large.

The refunds now being paid seem lower

Here are three readers reporting on emails they received last week – the first of the FCA-ordered refunds on the additional interest. These comments were left on my previous article: Vanquis to pay £168 million in refunds for ROP:

Jane June 14 My husband has just had an email and he is getting £40 back! Bizarre as he had ROP for 6 years and his credit limit has always been around 3,000. He has never cleared his balance. 
Alison June 14 I have just received a payment on the interest of the ROP for the princely sum of £5.14! – I have had my card for 3 years and have paid ROP since the start – mostly my card has been maxed out and the credit limit has been increased up to £4,000 over the years.
Kelly June 15 I am due a refund of £38 for interest charged on ROP. I have had my card since 2014. Cancelled ROP in November 2017 when I started reading about it. I started off with a £750 credit limit which increased almost every couple of months even though card was maxed and just making minimum payments. Current credit limit is 3,500 and balance has been sitting at that for last couple of years. I was paying £49 a month ROP. 

People would like an explanation of their refund amount

I can’t explain these recent refunds. There may be something unusual in a particular case, but there have been several low numbers reported.

I think Vanquis needs to state clearly how it is calculating these refunds. If Vanquis give me the explanation of how they are calculating the refunds, I will share it here.

Have you had a low offer?

See Vanquis ROP – the refunds are too low – it’s time to complain for what you should do. That has a template letter.

Please leave any comments or questions on that page, so they are all together!

Comments

  1. Kara says

    I asked them for condensed statements/list of all entries on May 25. They called me on June 12 to clarify what i wanted, and the man was sorting it as we spoke and said he’d get it straight out. 9 days later i’m still waiting. I know they have to provide it but you do wonder if they’re going to continue making this really hard for everyone.

  2. Sarah Battram-Cake says

    I made a complaint and was told I would be receiving *all* interest paid on ROP (it literally states that). I’ve had the card since 2014 and it’s been roughly £1500 for a fair while now (though not maxed out) and I’ve been refunded £2.40!

    • David London says

      £2.40?? Absolutely no way in the world that can be correct. What a bunch of jokers.

      • Sara (Debt Camel) says

        It is theoretically possible it could be right if she almost always cleared her balance until after the late 2016/7 letter explaining what ROP was.

        But it’s not very likely!

  3. Kelly McCandless says

    Received a phone call from vanquis today to explain my £30 refund. They say this is from OCT 2015 Until December 2016 30 days after they sent letters out. (I didn’t receive anything until December 2017 then cancelled ROP at the earliest opportunity IN JAN 2017. I was told they are basing it on £206 ROP which AVERAGES £13 a month So there calculation is the interest on £13 a month over 14 months.
    I took my card out in 2015 and the credit limit increased from £750 to £3500. I have NEVER cleared my balance, my card is maxed and I have always payed minimum monthy payments. You could probably work out from the figures below EXACTLY when my credit limit was increased! How they have arrived at a figure of £30 refund is beyond me.

    OCT 2015 £3.65
    NOV 2015 £6.11
    DEC 2015 £6.01
    JAN 2016 £5.74
    FEB 2016 £5.74
    MAR 2016 £10.39
    APR 2016 £12.16
    MAY 2016 £12.14
    JUN 2016 £12.15
    JULY 2016 £12.26
    AUG 2016 £21.89
    SEPT 2016 £25.08
    OCT 2016 £24.79
    NOV 2016 £23.90
    DEC 2016 £24.43

    Total ROP for 2016 £206.30

    JAN 17 £30.74
    FEB 2017 £31.60
    MAR 2017 £31.18
    APR 2017 £31.41
    MAY 2017 £31.66
    JUNE 2017 £31.54
    JUL 2017 £42.40
    AUG 2017 £44.50
    SEPT 2017 £43.12
    OCT 2017£43.75
    NOV 2017 £43.44
    DEC 2017 £43.29

    Total for 2017 £448.63

    TOTAL ROP PAYMENTS £654.93…………….Refund £30!!!!!!!!!!

    • Sara (Debt Camel) says

      Averaging is a very strange thing to do, it makes no sense in a situation of compound interest.

      If I take the 14 months ROP figures (so stopping at the end of 2016), using a card interest rate of 40% I still make the associated interest c £200.

      • Kelly McCandless says

        I agree. The 2016 figures are what they are using (£206.30). During the call she mentioned Averaging about 4 times and every time she did I questioned it but she didn’t give me a clear answer. I don’t remember exactly but things like ( because that’s the way we do it) and ( in line with the FCA recommendations. It will be interesting to see what they post out to me. I found it bizarre they suddenly called me out the blue yet I have been unable to speak to any of the “ROP TEAM” in the last 2 months.

        • Eve says

          Wow, that’s crazy if they are averaging, surely that can’t be allowed. I only have one yearly statement still in my possession Kelly, it’s at home and I’m at work just now but from what I remember it showed my :-

          purchase transactions : £113
          purchase interest : £68

          My card interest rate for purchases was roughly 39.9% and cash interest was 44.9%. I only used my card for cash transactions so the purchase transactions on this annual statement could only have been for ROP. My purchase interest for that one year was more than double what they are trying to refund you yet my ROP was only half your amount? I hope you manage to get this sorted and the correct refund given, good luck.

          • Kelly says

            Hi Eve. I think they are clutching at straws now and hoping people see a refund and take it. Little do they know how much we have educated ourselves thanks to Sara. I have sent them a SAR asking for that Phone call in writing and all my statements but in the mean time I have sent my complaint the rejected in March to the ombudsman. Hopefully paperwork will be through when ombudsman picks this up. All i would say to everyone is dont give up. They have not been consistant in any of there refunds and i hope the FCA follows up on this. If i get rejected again I will go for unaffordable lending. I was originally sold on this card as it would supposedly help my credit score. I now have a maxed card at £3500 which I am throwing £180 a month at and I can’t get it down. And guess what? I have 9 good points on my credit score and 1 going against me and that is this credit card. Sickens me. X

  4. Ian R says

    My vanquis account mirrors some of previous comments -looking at all the stuff I’ve had from vanquis there’s no letter telling about interest on rop-I can’t wait to see how much they refund offer is-if it’s low i’m straight to their e mail address you’ve provided.

  5. Andrew says

    I haven’t had a refund offer yet, but a letter sent to me by Vanquis on 19 June following a complaint from me clearly states “We will be refunding you the interest charged relating to the Repayment Option Plan from 5 February 2013 until the refund is processed.” I am expecting interest to continue to accrue well into 2018 and possibly beyond if they continue to be so slow in addressing this. I have now written a SAR request as they appear to be consistently inconsistent!

  6. nichola says

    I contacted vanquish on a number of times over the past 2 months about my refund and the only answer I get is don’t know what you will be refunded as we got 180 days

    • Sara (Debt Camel) says

      So your account is closed? Did you ever get charged a lot of over limit fees?

    • Max says

      Same as me I have received a text message from Vanquis on 8.5.2018 saying I may be eligible for a refund which they will usually provide within 180 days!

  7. Ian R says

    Sara have any people who had refund so far had a large one- except for the ones who a complained directly-are auto refunds very small in comparison or is it the on.es who’ve had large amount just not saying in your column–I wonder ????

  8. John Jones says

    So let’s get this straight, this refund exercise is for the interest that the ROP charge attracted. Not the ROP charge itself. Then once they total the exact refund for a particular year they then divide by 12 to average it out. And Voila….you have your refund.
    Oh and because we pleaded with the FCA that it would be too difficult to consider the wider impact of the ROP charge, we got away with not refunding any over limit fees that were a directly result of the ROP charge & the interest that ROP charge attracted.
    Oh a lastly, this isn’t a refund exercise to suggest the ROP was mis-sold either….hence why you’re not getting back the ROP charge itself too.
    What poor regulation, naive regulation…..but lets raise a toast to the person at Vanquis that well and truly pull the wool over the eyes of everyone on this. Job well done!

  9. Danielle Doyle says

    Hi, how far back for these charges relate too. I have previously received refund for missold ROP for card closed in June 2012.

      • Danielle says

        Thanks for this, I have had a look and sent across SAR to establish if I am likely to have a claim against guarantor loan

  10. Sharon M says

    Following my lower than expected refund, I submitted a SARS request at the end of June.
    Today I have received a recorded delivery letter from Vanquis with what should have been my statements.
    However when I opened the letter – which was addressed to me – the statements that were attached were for another Vanquis customer!!!! This is a serious data protection breach and I am very concerned as to where my statements have been sent.
    I have emailed Vanquis this evening about this and asked them for an urgent response.
    I will also be emailing the customer whose information has been sent to me as I suspect Vanquis will not notify this customer of this serious mistake.
    Just when I think Vanquis can’t get any worse ….

    • Eve says

      Omg that’s shocking Sharon! Like yourself I didn’t think Vanquis could get any worse but as the months go on there is just more and more mistakes happening but that is seriously not a good one. I hope you get it all sorted out asap and get compensated in some way for this as I know I personally wouldn’t like anyone else being sent my confidential information.

        • Sara (Debt Camel) says

          They were hoping to pay people with open accounts by “the end of the summer” but they now seem to be saying by February 2019.

  12. Anna says

    HI, Ive just paid off the balance of my card after having it for 11 years. My credit limit obviously grew over the years and has been at £4000 for about 5 years – its always been up there at the limit pretty much since I got it. I dont remember ever receiving a letter about this, but I have been going through cancer treatment for nearly 2 years, so could have been missed. Since clearing my account, I notice my online statement has a refund for ROP of the amount £56.87. Does this seem correct?

    • Sara (Debt Camel) says

      That doesn’t sound right at all.

      Did you realise you were paying for ROP? That it was an optional add on, or did you think it was just part of the Vanquis card?

      • Anna says

        I actually had no idea I was paying it. It was only when I checked my final statement and saw ROP refund that I googled to see what it was

        • Sara (Debt Camel) says

          Sorry, I missed your reply.

          I suggest you read https://debtcamel.co.uk/vanquis-rop-3-refunds-wrong-complain/ which explains why Vanquis’s refund calculation is wrong and has a template letter for you to complain.

          If you didn’t understand that the ROP was an optional extra, their sales call at the start must have been very poor! So I suggest you also complain that it was never properly explained to you so you didn’t realise you could cancel it. And ask for the ROP itself to be refunded.

    • Sara (Debt Camel) says

      Template letter here: https://debtcamel.co.uk/vanquis-rop-3-refunds-wrong-complain/.

      If you want to complain and ask for a refund of the ROP itself, not just for your interest refund to be properly calculated:
      – don’t say you want a refund of the ROP because you didn’t know about the interest – that will just get the interest refunded not the ROP itself.
      – don’t say you had never heard of the ROP because it’s on your statement – instead say it wasn’t properly explained to you. Which it couldn’t have been or you would have known all about it!

  14. Ian R says

    Sara have anybody who complained directly to vanquis about a return of ROP payments been successful yet or have they all had to go to FSO to get anywhere- I’ve complained to vanquis- are we wasting our time -Your thoughts please-?

    • Sara (Debt Camel) says

      There are quite a mixture of complaints at the moment. Some people had complained before the Feb announcement, some people afterwards but before the refunds started, some people have cases over 6 years old, some people have over-limit fees, some people have unusual situations eg they had 2 separate periods where ROP was charged.

      And this is made harder to see because people are coming back on different pages… this one, the original page on the refunds https://debtcamel.co.uk/vanquis-refunds-168m-for-rop/ and my latest one https://debtcamel.co.uk/vanquis-rop-3-refunds-wrong-complain/ where I have given some reasons why the Vanquis refund is wrong. I am going to close all the comments except for the latest page and also move some recent comments on to that page – including this one from you!

      My feeling at the moment is that:
      – in general Vanquis is not coming back to anyone with revised offers, so you should expect to have to send your case to the Ombudsman
      – some people who haven’t yet had an offer are being given a full refund by Vanquis directly if they have complained the ROP was mis-sold
      – if people get a rejection from Vanquis and send the case to the Ombudsman, Vanquis is sometimes jumping in with a full refund offer, of the ROP as well.

      I am wondering if Vanquis would prefer to give full refunds to people who do complain rather than admit they have got their calculations wrong!

      So far we haven’t seen anyone who has been offered a refund which is too low yet have a ruling by the Ombudsman – there hasn’t been time for these decisions to come through.

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