Bank sues claim managers over ‘spurious’ complaints

VANQUIS BANK is suing a claims management company at the High Court after a slew of compensation demands triggered a shock profit warning.

The lender has lodged a case against TMS Legal, a law firm specialising in financial claims against banks. The level of damages sought is not yet clear but Vanquis has hired City law firm Herbert Smith Freehills to lead the action.

Vanquis shares crashed 50pc last month after it warned that a surge of customer complaints about credit cards would dent profits.

Even though most of the complaints were not upheld, the bank said the £750 cost of processing each one was causing its overheads to balloon.

Vanquis chief executive Ian Mclaughlin told investors last week the firm was taking “appropriate legal action” against an unnamed claims management firm.

He did not name the group but case filings show TMS Legal is the target of the Vanquis complaint. The Dorset-based firm, which employs 23 people, specialises in seeking refunds for clients of financial institutions who, it claims, may have been mistreated or mis-sold financial products.

Without naming TMS directly, Mr Mclaughlin said: “We are getting swamped with what turned out to be mainly spurious complaints.

“It’s the spurious, speculative complaints that are just scraped off Tiktok or social media, that we’re really having an issue with.

Most claims management companies go through a very rigorous process of verification and identification of what the issue is and then submit it. The issue we have with this particular actor is that they do not seem to be doing that and we are getting inundated with a load of claims that turn out to be spurious.

“We’re just not prepared to sit back and let this happen if it’s not being done in a way that we think is correct.”

Vanquis declined to comment. TMS Legal was contacted for comment.