Vanquis Bank Limited · DRN-6258896

The complaint Mr R is unhappy that Vanquis Bank Limited made several errors on his account, including an incorrect payment, an unauthorised promise-to-pay arrangement, and a failure to close his account when he asked. What happened Mr R held a credit card account with Vanquis. In April 2024, a payment of £925.80 was applied to his account in error. Vanquis later reversed this payment, which meant his direct debit did not collect as expected and a late payment fee and marker were applied. Mr R contacted Vanquis several times in May 2024 to understand what had happened. Vanquis accepted the payment had been made in error, removed the late marker from his credit file, and refunded the related charges. They also offered Mr R £60 in compensation, which he accepted. In July 2024, Mr R contacted Vanquis again after discovering that a “promise to pay” arrangement had been placed on his account without his agreement. Vanquis agreed they couldn’t evidence his consent to this and apologised. Although the late and over-limit fees applied at that time were valid, Vanquis refunded them as a gesture of goodwill and offered a further £20 compensation. Mr R later brought his complaint to our service, saying that Vanquis’ errors had continued and that they had not properly addressed all the issues he had raised. Mr R also told us he had asked Vanquis to close his account, but Vanquis hadn’t done so. One of our investigators looked at this complaint, and during their review Vanquis confirmed that Mr R had asked for his account to be closed in April 2025. Vanquis said the request had been actioned and advised that it could take some time for the change to appear on his credit file. Mr R disputed what Vanquis had said and told us that he could still log in to his account and that it continued to show as open on his credit report. Mr R provided screenshots to show this. After we went back to Vanquis about this issue several times they eventually identified that, due to a system error, the closure request hadn’t been processed internally. This meant the account had remained open for several months despite Mr R being told otherwise. Vanquis then submitted a new closure request and said they would backdate it to April 2025. Mr R was very unhappy about the ongoing issues, especially because he was in the process of applying for a mortgage at the time and was concerned about the impact of the open account on his application. Vanquis acknowledged the closure error and the earlier issues on the account and made several offers of compensation during the investigation. But Mr R didn’t accept these offers and asked for an ombudsman to make a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I issued a provisional decision on this complaint on 12 March 2026 as follows:

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In April 2024, Vanquis applied a payment to Mr R’s account in error and then reversed it the following month. This caused Mr R’s direct debit not to collect and resulted in a late fee and a late marker on his credit file. Vanquis acknowledged the error, removed the late marker, and refunded the related charges. They also offered Mr R £60 compensation, which he accepted. Given that Vanquis identified the error, corrected the credit file, and refunded the fee, I’m satisfied they took appropriate steps to put this right. The compensation offered for the distress and inconvenience caused at that time was reasonable, and I don’t think anything further is required in relation to this part of the complaint. A “promise to pay” was added to Mr R’s account in July 2024 without his agreement. Vanquis have accepted they couldn’t evidence that Mr R ever made such a promise and they refunded the late and over-limit fees that had been applied at the time and offered a further £20 compensation. While the fees themselves were valid, the reimbursement of them feels fair to me, and I’m satisfied that Vanquis took proportionate steps to address this error once it was identified. I’ve also considered the compensation offered. Although Mr R did not receive the £20, Vanquis included it within a later combined offer. In the circumstances, I think £20 was an appropriate amount for the inconvenience caused by the incorrect addition of the promise to pay. Mr R also asked Vanquis to close his account, which Vanquis didn’t do. Vanquis say Mr R asked for his account to be closed in April 2025 and that they believed this had been actioned. However, Mr R continued to have access to the account through the app, and it continued to show as open on his credit file for several months afterwards. Mr R repeatedly raised this with both Vanquis and our service and provided screenshots showing the account was still active. Vanquis continued to say the account was closed until, after further enquiries from us, they identified that the original closure request had not been processed due to a system error. Only then did they resubmit and progress the closure, and they said they would backdate it. Vanquis’ failing in this regard was clearly impactful on Mr R, who reasonably expected his account to be closed when he asked, and was repeatedly reassured that it had been. This prolonged the matter unnecessarily and caused ongoing uncertainty, frustration, and distress, which has been evident in Mr R’s correspondence with this service. Mr R also explained that he was attempting to secure a mortgage during this period and was concerned that the open account could affect his application, and I feel that the timing of these events would likely have heightened the stress Mr R experienced. Mr R believes the issues with Vanquis, including the fact that his account remained open, caused him to receive a higher mortgage rate than he otherwise would have been offered. However, to award compensation for financial loss, I would need persuasive evidence that Vanquis’ actions caused this outcome. I’ve reviewed the information provided, including the mortgage documentation, and I haven’t seen evidence that the open Vanquis account led directly to Mr R receiving a higher rate. Notably, the lender’s correspondence refers to historic payment information rather than to the presence of an open credit card account, and while Vanquis did have cause to correct Mr R’s credit file, as explained above, they had already done so before Mr R applied for the mortgage. Accordingly, I’m not persuaded that it’s more likely than not that Vanquis’ failings directly caused a financial loss in this respect, and for that reason, I’m not asking them to reimburse any difference in mortgage interest to Mr R as he would like.

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Although I don’t think Vanquis caused Mr R a financial loss related to his mortgage, the overall handling of his account closure, combined with the earlier failings, caused him considerable and prolonged distress. These issues continued over many months, required repeated intervention, and occurred at a time when Mr R was dealing with an important financial matter. I’ve taken this into account in assessing what is fair compensation. Vanquis have already paid Mr R £60 and offered further amounts throughout the investigation. However, in view of the prolonged failure to close Mr R’s account, the repeated incorrect information he received, the need for Mr R to repeatedly chase both Vanquis and our service, the heightened impact due to the timing of these events, and the cumulative effect of several separate errors, I don’t think the compensation offered so far fairly reflects the distress and inconvenience that Mr R has unfairly experienced. I’ll therefore be provisionally upholding this complaint in Mr R’s favour and instructing Vanquis to pay a further £400 compensation to him, in addition to the £60 that they’ve already paid. In arriving at this compensation amount, I’ve considered the impact of what happened on Mr R, as described above, alongside the general framework this service uses when assessing compensation amounts, details of which can be found on this service’s website. And, having done so, I feel that £400 further compensation is a fair amount. *** Both Mr R and Vanquis responded to my provisional decision and confirmed that they were in acceptance of it. As such, I see no reason not to issue a final decision here whereby I uphold this complaint in Mr R’s favour on the basis described in my provisional decision. And I therefore confirm that my final decision is that I do uphold this complaint on that basis accordingly. Putting things right Vanquis must pay a further £400 to Mr R. My final decision My final decision is that I uphold this complaint against Vanquis Bank Limited on the basis explained above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 24 April 2026. Paul Cooper Ombudsman

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