FCA UK fines credit card lender Vanquis $2.7M over the failure to disclose the full price of an add-on product, Repayment Option Plan (ROP) to its clients. The UK regulator further states that the firm will also need to repay an estimated £168,781,000 in compensation.
27 February, AtoZForex – The UK financial markets regulator, the Financial Conduct Authority, has imposed a fine of £1,976,000 on the credit card lender, which operates under the name Vanquis. The FCA notes that the company has failed to disclose the full price of an add-on product, Repayment Option Plan (ROP).
FCA UK Fines Credit Card Lender Vanquis $2.7M
The UK regulator further states that the firm will also need to repay an estimated £168,781,000 in compensation. According to the FCA, this constitutes the amount of charges not disclosed to customers when they purchased the ROP. The official press release from the UL watchdog states:
“When selling the ROP, Vanquis told customers how the product worked and what the monthly charge was but did not inform customers that the full cost of the product included an interest component where there was an end of month unpaid balance on their credit card.”
The regulator has further ordered Vanquis to repay the interest customers were charged on the ROP starting from the 1st of April 2014 to when customers were informed about the full ROP cost. Vanquis has agreed to repay the interest on the ROP from June 2003 to 31 March 2014.
Vanquis Takes Initiative to Compensate Cliens
The FCA Director of Enforcement and Market Oversight, Mark Stewart, has stated:
“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.”
He also added that Vanquis has decided to acknowledge the misconduct and offer the compensation to the customers. Mr. Stewart states that the regulator is pleased that the firm has decided to extend the compensation to customers who bought the ROP before the FCA has commenced the regulation of markets.
Think we missed something? Let us know in the comments section below.