HRG compensation fund

Argos owner Home Retail Group is setting aside at least £30 million to compensate store card customers after overcharging late payment fees.

Home Retail uncovered errors in the calculation of late payment fees for up to 10% of Argos card customers.

The details emerged as it posted its best sales performance for two years after shrugging off poor early spring weather and the “distraction” of its £1.4 billion takeover by Sainsbury’s.

Home Retail Group said like-for-like sales at Argos edged 0.1% higher in the 13 weeks to May 28, while total sales rose 2.6% to £868m, thanks to a surge in online sales.

The group had already put by £17m in full-year results to cover charges, including the store card payment errors and redress for mis-selling of payment protection insurance.

It warned in its latest trading update that it may need to set aside around another £30m.

Those affected are expected to receive compensation of up to £100 each.