Following the announcement of its best sales performance in two years, Argos owner Home Retail Group has said it is setting aside at least £30m to use as compensation for store card customers who were overcharged for late payment fees.
The retail group noted that it recently discovered errors in the calculation of late payment fees for some of its Argos card holders. Home Retail said that the issue was now more wide spread than initially thought.
Chief Executive of Home Retail Group, John Walden confirmed that the miscalculation affected up to 10% of Argos card customers, but said the issue is “not material”.
“It’s not a material number of customers and not a material amount of money per customer.
“But for each customer it matters. We will address it and treat customers fairly.”
Home Retail had already assigned £17m in full-year revenue to the end of February to cover the charges including store card payment errors and the mis-selling of payment protection insurance.
After its recent findings, however, the retail chain may need to set aside a further £30m.
Those affected will receive compensation of up to £100 each and Home Retail will be writing to affected customers in the next few weeks.
Guy Anker, Managing Editor at consumer advice website moneysavingexpert.com, said: “Store cards are the devil of plastic as it is”.
In the current year Home Retail has sold its DIY chain Homebase to Australian conglomerate Wesfarmers and has agreed a £1.4bn takeover deal with supermarket chain Sainsbury‘s.
The deal is currently being investigated by the Competition and Markets Authority and is expected to be made concrete in the third quarter of the financial year.