Recovery on track for Vanquis, resulting in a switch to profitability
Vanquis Takes Legal Action Against Claims Management Companies, Sees Financial Recovery
Vanquis Bank, a Bradford-based lender, has initiated a legal battle against certain Claims Management Companies (CMCs), including The Money Solicitor Legal Limited (TMS). The bank accuses the CMCs of submitting reckless and unmeritorious complaints related to irresponsible lending [1]. The High Court recently allowed Vanquis' novel tort claim for causing loss by unlawful means to proceed, rejecting TMS's attempt to have it struck out [1].
The legal action aims to hold CMCs liable for losses caused by indiscriminate complaints, which could potentially influence their operational models going forward [1][3].
In its 2025 half-year results, Vanquis reported a return to profit, with a profit before tax of £6.2m, a significant change from a £91.9m loss in the second half of 2024. The bank attributes this turnaround to the recent Supreme Court judgment, which has led to negligible Vanquis-related CMC complaints being referred to the Financial Ombudsman Service (FOS) [2][4][5].
The Financial Conduct Authority (FCA) has warned CMCs and law firms about aggressive and speculative claim promotion in motor finance, including potential misconduct in the sector. In response, the FCA is considering introducing a redress scheme for motor finance customers to provide an accessible, regulated path for claims without the need for CMCs [3]. This proposed redress scheme may further reduce the risk and cost of such complaints for banks like Vanquis.
Ian McLaughlin, chief executive of Vanquis, expressed confidence in the bank's position, citing its non-participation in discretionary commission arrangements (DCAs) [5]. He stated that the turnaround of Vanquis remains firmly on track and is gaining momentum.
In the first half of 2025, Vanquis' total income took a three percent hit, but net interest income grew by one percent. Operating costs dropped by 24 percent year-on-year to £137.4m, while FOS fees increased by 66 percent to £24.8m due to the surge in complaints in the second half of 2024 [2][5]. However, complaints costs were reduced by 36 percent in the first six months of 2025.
The City watchdog expects the total costs of its redress scheme to be between £9bn and £18bn [6]. One claimant was granted compensation under the Consumer Credit Act in the Supreme Court's verdict [7].
In conclusion, Vanquis' legal fight against reckless CMC claims, particularly against TMS, is progressing positively in court. The recent Supreme Court judgment and regulatory warnings have significantly diminished the volume of new CMC-driven complaints against Vanquis, benefiting its financial health [2][4][5]. The FCA's forthcoming redress scheme for motor finance claims may further reduce the risk and cost of such complaints for Vanquis, stabilizing its financial position related to past lending claims [3].
[1] https://www.lawgazette.co.uk/news/vanquis-bank-wins-high-court-permission-to-sue-claims-management-company/5115321.article [2] https://www.ft.com/content/2b553d1b-4f9b-477a-a92b-c07353a0e03f [3] https://www.fca.org.uk/news/press-releases/fca-proposes-redress-scheme-for-motor-finance-customers [4] https://www.cityam.com/vanquis-bank-says-supreme-court-ruling-will-lead-to-reduced-complaints-costs/ [5] https://www.finextra.com/newsarticle/38614/vanquis-half-year-results-2025 [6] https://www.ft.com/content/41b4176a-124e-483d-a0f0-8866d9f862a2 [7] https://www.thetimes.co.uk/article/car-finance-firms-face-bill-of-18bn-for-redress-scheme-ruling-j4b7k26kd
- The legal action taken by Vanquis Bank against Claims Management Companies, like The Money Solicitor Legal Limited (TMS), could potentially change the operational models of these firms within the finance and banking-and-insurance industry.
- The Financial Conduct Authority's (FCA) planned redress scheme for motor finance may further impact the finance industry, as it aims to reduce the risk and cost of complaints for banks and lenders such as Vanquis.
- The half-year results of Vanquis Bank demonstrated a significant financial recovery, with a return to profit and a reduced number of complaints, which can be attributed to legal actions against Claims Management Companies and regulatory warnings in the industry.
