More than 180,000 credit card customers of the firm New Day – which provides Aqua cards and storecards for Debenhams, House of Fraser, Topshop and more – can expect to pocket an average refund of £20 each after they were hit with unfair additional charges on top of default fees and other charges.
The unfair charges were uncovered by New Day itself as part of an internal review to prepare for the Financial Conduct Authority's new regulatory regime for credit, which came into effect in April 2014.
Its review looked at the fairness of its charging model, and concluded some cardholders had been charged fees they did not anticipate or which were not clearly understood. New Day has since concluded these fees should no longer be charged.
In addition, delays in posting transactions meant some customers incurred additional charges New Day felt were unfair.
Here's what you need to know about the investigation, plus what to do next if you're owed a refund.
Who is entitled to a refund?
New Day says more than 180,000 customers – around 3% of its customer base – can expect to share more than £4 million in refunds in total.
New Day provides general purpose, co-branded credit cards for firms Aqua, Marbles and Opus, aimed particularly at those who are overlooked or neglected by conventional lenders or find it hard to get credit elsewhere.
It also provides storecards for some of the UK's best-known brands, including Burton Menswear, Debenhams, Dorothy Perkins, Evans, House of Fraser, Laura Ashley, Miss Selfridge, Outfit, Topshop and Wallis.
It's not immediately clear which of these cards are affected, but New Day says customers who have been charged unfair fees since 1 April 2014 will be contacted directly and offered a refund. New Day’s scheme will not cover customers charged fees before 1 April 2014, though the firm says it will consider any complaints about these on a case-by-case basis.
I think I might have been charged unfairly by New Day – what happens next?
If you're due a refund you don't need to take any action, as New Day will be writing to you directly over the next two to three months.
In most cases, customers will receive a credit on their account, though some may receive a cheque instead. Some may also be due additional compensation for interest incurred depending on their individual circumstances.
New Day has vowed to "take all the necessary steps" to contact historic customers, but if you think you may be owed a refund and are concerned New Day may no longer have your current address, it's worth contacting the firm on the numbers below:
- Aqua, Marbles and Opus customers can call 0330 3333 080.
- Storecard customers can call 0330 3333 079.
What does New Day say?
New Day says none of its customers have been unfairly charged since 1 January 2016, and it's planning to set up tailored alerts to help customers avoid incurring fees by making prompt payments.
A spokesperson says: "In 2014 we commissioned an independent review into how we charge fees across our credit card products. Our review identified a small number of circumstances in which some customers were charged fees that they did not anticipate or were not clearly understood, and we concluded that these fees should no longer be charged."