FCA fines Provident's Vanquis unit £2m for mistreating customers

"Most Vanquis customers chose the ROP to help manage their credit without realising instead that the product might lead to their indebtedness increasing. "

The firm will also repay an estimated £168,781,000 in compensation which constitutes the amount of the charges not disclosed to customers when they bought the ROP.

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.

Vanquis agreed with the FCA to enter into a voluntary requirement to suspend all new sales of the ROP in April 2016

Vanquis is a subsidiary of Provident Financial, which announced last year that pre-tax losses would be between £80m and £120m for 2017 after a new business model reduced profits.

Its CEO later stepped down and a recovery plan was launched, which included conducting a Vanquis customer contact exercise relating to the sale of ROP.

Mark Steward, director of enforcement and market oversight at the FCA, said: "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.

"Vanquis has decided now to do the right thing by acknowledging the wrong-doing and offering to compensate its customers. We are pleased the firm has extended the compensation to customers who purchased the ROP before we took responsibility for regulating the consumer credit market."