Vanquis - beware interest charge

Hazzo

I have been a good lad and have been paying off my statement balances, mainly because I am terrified of the near 50% interest that applies on this card. To my astonishment, I was charged 75 pence!!! last month when it was obvious I had paid off my current and previous statement balances. I telephoned Vanquis (at a cost of £1.35!) and was told that their systems automatically apply an interest charge in cases where we, as customers, continue to use our cards during the current statement period. Apaparently the only way to avoid interest is to pay off the statement balance and to not use the card until after the next statement balance (i.e. after 2 statement dates). Their T&C's clearly state that interest does not arise if you pay off the statement balance but they will only refund the incorrect interest charged on what they call 'current purchases' if you telephone and draw their attention to it. Thankfully my credit limit is small so they cannot inflict much in the way of damage.

tom188

If I understand what you are saying correctly this is common practice on almost all credit cards. If you dont clear in full you will continue to incur interest between statement date and when you pay, and this is carried forward.

Hazzo

I think you may have misunderstood me. I do fully pay off my statement balances, yet I still incur interest which they (Vanquis) will only refund if I telephone them to ask for it to be refunded. Vanquis say that their operating software does not enable them to prevent incorrect interest charges being appplied where statement balances have been repaid and where the card has been used again in the subsequent month. Vanquis also said that the only way to avoid the computer automatically generating an interest charge is to not use the card in the month following full payment of the statement balance. T&C's say that if statement balance is paid, no interest will arise but this does not account for the obvious deficiency in their management software. Capital One and Aqua do not act in this manner i.e. they are paid in the same manner and do not charge me any interest; cannot comment on any other company. Hope this clarifies matters.

yorkie1980

Hi igh10, I have vanquis card and pay it off in full on 27th (payday) each month. When I first did this, the CS advisor told me not to use my card until the 3rd of the next month (about 6 days) to avoid incurring this interest.
On the 3rd of the month, my new billing period begins.
If I was to use my card between 27th-3rd, then I would be charged appropriate interest. Also, failure to pay for this, may result in late payment fee.
From my experience there are two options:
1) Find out your billing cycle dates, pay off early and don't use until next cycle
2) Wait until you receive your bill, then pay it off.

In my experience, both of these will stop any charges / penalties being applied (provided you pay off in full of course!)

Hope this helps, yorkie1980

jamalfatty

I've got a vanquis card and the above has never happened?! Use it pretty much every day, always pay off in full and have never paid interest - never had to leave a gap between payment date and using it again

inmypocketnottheirs

I am a frequent vanquis user and have never had the problem either.

Zebedee69

Not Vanquis but Cap 1 and this never happened to me?..... Thought you had 50 odd days interest free anyway....

yorkie1980

What I think has happened is that igh10 has paid off his balance early, used his card again, then not paid his statement when it arrives, believing that it is clear. You could therefore, max your card out 10 times a month and pay it off in ful each time, but if the balance isn't at zero when the statement is produced and you don't pay on the statement, then you will be charged.
Please correct me if I'm wrong, I don't want to be presumptuous.
I've not fallen foul of this, or had any probs at all with Vanquis, but I am always sure to check my statement and pay it off in full - even if it's pennies.

fico

this has been regularly happening to my wife over the last 6 months who pays off the full balance every month via direct debit - we have had to call back every month to get the charges reversed.

When we call the first thing customer services does is try to fob us off, when we start to state actual facts then they realise what has happened.

Last month we decided to close the account after havving the account open for over a year. We thought this was done after speaking to a supervisor but received a statement this week and it had a "minimum interest charge" of £1

We called up customer services they said it is because we have used the card! it hasnt been used in the last 2 months!!

This is ridiculous, I can see this happening to a lot of people, they may not notice if they dont check their statements etc.

Is it worth me writing to financial ombudsman about this at all? what else can I do as we are waiting for a call back from the supervisor again!

izools

This old chestnut again.

The problem arises because Vanquis' system can't cope with transactions posted to the account on the day the statement is produced. If a purchase is posted on the statement date, then an erroneous one pound minimum finance charge is generated.

However this is a breach of their T&C.

They have been aware of the problem for many years but still haven't implemented a fix, they just let it carry on and pocket all the pounds they earn from customers that don't notice.

If if happens again call them explaining this and they will refund it - but call them at their own expense using - 0800 7816314.

I would also urge you to follow up with a written complaint asking them to explain what fix they will implement on the system to ensure the error doesn't re-surface and how long it will take to implement. If they can't say, escalate it to the FOS.

These shysters have been raking in god only knows how much from customers who don't notice this charge, and follow it up by lying to them when they call. It's illegal, a breach of their own T&C, and IMHO should be met with the full force of the law.

fico

thanks for the 0800 number worked well

the first time they cut us off when we asked for a supervisor!!

we called back being polite asking for a supervisor - the customer service rep wouldnt put us through

they kept on saying nothing is on the account notes at the start of the call as they were asking what the issue is as they didnt want to put us through

now they are saying the account wont be closed until they take that £1 - but they are supposed to be refunding this

after being put on hold they are now cancelling the direct debit and waiving the £1 so we should have a final statement next week

at the end of the call they also found the account notes!!