FOS Complaint for Vanquis 'Gold' card

PeteMate · 31 May 2011 at 5:56PM

Hi, I've just spoken to the FOS regarding Vanquis and their apparent contempt for their customers.

I opened a Vanquis card a few years ago and remember the interest rate starting at 39.9% I had a default on my credit file so i went for it and by managing it properly, I now have a £3000 limit.

Interestingly though, i also have a 69.9% interest rate.

when i called regarding the interest rate, the advisor gave me the company line of 'by properly managing the account, you will see the interest rate fall'.

Not true. My complaint goes along these lines:

If i've paid on time every time more than the minimum balance, why is this not proper management in their opinion?
If i haven't properly managed the account, why have i had increase after increase to my credit limit
where the hell does it say 69.9% interest on their e-statements??

I'm working my way to closing this account now, but i feel for all those 'sub prime' (generally less well off) customers who agree to one contract and have the goalposts shifted so they're in a ton of debt. If there's anyway i can stop them from getting away with this, i'm going to try. Who's with me?? :j

Edit: Also, after looking online, their estimated interest is more than their minimum payment. Is that even legal?

izools · 31 May 2011 at 6:10PM

Vanquis also stated in a press release a few years ago that customers are started at a typical 39.9% APR but would see this fall if they properly managed their aco!!!!.

My OH started at £250 and 39.9% APR, paid on time, every time, way above the minimum, nearly full, kept the balance well within the limit, and just like you ended up on 69.9% APR with a £3,000 limit. Absolute contradiction towards their press release.

... Here it is:

http://www.thisismoney.co.uk/credit-and-loans/article.html?in_article_id=403814&in_page_id=9

And the APRs are reduced every year if they keep their account in control

Bullplop.

Good luck with your complaint, they'll be a tough cookie but stick with it. Keep us posted

PeteMate · 31 May 2011 at 8:17PM

izools wrote: »

Good luck with your complaint, they'll be a tough cookie but stick with it. Keep us posted

Thanks, I'm a salesman by trade, so i'm generally pretty effective at getting my point across. I know they'll do their best to ignore me, but even if i only get them to display the APR on their e-statements, that'd be something, and it might make a fellow 69.9% victim realise just how badly they're being fleeced!!

izools · 31 May 2011 at 10:04PM

It's not just displaying the APR.

They also mislead people into thinking they have a lower APR than they do - as they quote the simple interest rate on their paper statements, not the annual percentage rate.

All creditors are required to advertise the APR (I.e. the compounding interest rate) for all credit products.

But if you or I take out a Vanquis card it is delivered on a letter stating (for example) the "Interest Rate" is 34.08%. That is the Simple rate - which equates to a compounding rate (APR) of 39.9%.

They do this to try and make it look like they're cheaper than they actually are. I even remember, when I was a customer of theirs, asking what my APR was and always being told the simple rate - basically being lied to - because I hadn't asked for the simple rate but that's what I was told.

They deserve everything they've got coming to them. Good luck!

ICan'tStandIt · 31 May 2011 at 10:43PM

PeteMate wrote: »

Edit: Also, after looking online, their estimated interest is more than their minimum payment. Is that even legal?

The minimum payment is just a percentage of the outstanding balance (normally between 2% and 3%) and it's not illegal for that figure not to cover the interest.

Immoral ? Yes. Illegal ? No.

Unless the APR is very low the minimum payment is always very close to the interest amount.

I think a rate of about 9.9% APR would be needed to make any progress with just paying the minimum payments.

Who owns Vanquis ?

I'm assuming that as you are talking to the FOS you have been through the credit card issuer's official complaints procedure and obtained a Final Response ?

If so, what did they say ?

OverRated · 31 May 2011 at 10:49PM

ICan'tStandIt wrote: »

The minimum payment is just a percentage of the outstanding balance (normally between 2% and 3%) and it's not illegal for that figure not to cover the interest.

Immoral ? Yes. Illegal ? No.

Unless the APR is very low the minimum payment is always very close to the interest amount.

WOW that *really* should be illegal! A very unethical practise.

MorrisonsEmployee · 31 May 2011 at 11:05PM

I think Vanquis have always got away with the above as people are usually so pleased to have the chance to build their credit rating again that they don't challenge the APR hikes - Will be interesting to see the outcome of this as there is clearly a case - People report in the Vanquis thread all the time that they always pay on time etc, and still have hefty APR hikes.

PeteMate · 31 May 2011 at 11:09PM

ICan'tStandIt wrote: »

The minimum payment is just a percentage of the outstanding balance (normally between 2% and 3%) and it's not illegal for that figure not to cover the interest.

Immoral ? Yes. Illegal ? No.

Unless the APR is very low the minimum payment is always very close to the interest amount.

I think a rate of about 9.9% APR would be needed to make any progress with just paying the minimum payments.

Who owns Vanquis ?

I'm assuming that as you are talking to the FOS you have been through the credit card issuer's official complaints procedure and obtained a Final Response ?

If so, what did they say ?

I sent a letter and received no response and was fobbed off on the phone. The FOS have sent a letter on these grounds, and if i'm still not satisfied with their final response, then the FOS will examine my complaint further.

Also, Provident own Vanquis i think....

ICan'tStandIt · 31 May 2011 at 11:23PM

OverRated wrote: »

WOW that *really* should be illegal! A very unethical practise.

It isn't ethical you're right, but as I said it is not illegal and everything is in the good ol' T&Cs !

Credit cards are very much a case of "buyer beware!"

The problem is that credit cards are marketed in such a way that can cause some very intelligent people to come unstuck with them and they don't see it happening until it is too late.

PeteMate wrote: »

I sent a letter and received no response and was fobbed off on the phone. The FOS have sent a letter on these grounds, and if i'm still not satisfied with their final response, then the FOS will examine my complaint further.

Also, Provident own Vanquis i think....

The letter the FOS have sent might just ask for a copy of their Final Response to which Vanquis might just say that they have no record of your complaint.

I would chase up your letter and insist your complaint is formalised as the FOS don't normally get involved until the card issuer have responded, formally, to your complaint.

izools · 1 June 2011 at 7:06AM

ICan'tStandIt wrote: »

...the FOS don't normally get involved until the card issuer have responded, formally, to your complaint.

... Or failed to respond for 8 weeks or more

PeteMate · 1 June 2011 at 8:34AM

izools wrote: »

... Or failed to respond for 8 weeks or more

Actually, I made use of them before with yes loans a few years ago as they owed me money. They were the most difficult ***** i've ever dealt with. The FOS helped me get a cheque for what i was owed (plus my expenses chasing the debt) after 3 weeks of non response to my letter.

FOS Complaint for Vanquis 'Gold' card

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