I spoke to Creation, who told me, as others above have already discovered, that Creation will not be honouring the issuing of the free night voucher or giving a pro-rata refund of the £99 annual fee for accounts that it has unilaterally given notice to close. I asked for a reason, but the representative was unable to give me one, so I raised a complaint about both matters.
It’s useful to read Creation’s terms and conditions for this card:
4. Anniversary night voucher
On the anniversary of your account opening, so long as your account remains active, you will earn one anniversary night voucher anniversary night voucher to redeem at any IHG property, provided you make annual pPurchases totalling a minimum of £10,000. Annual purchases are calculated from your account opening date to the day before the first anniversary, and thereafter on an annual basis. This offer is subject to your IHG Rewards Club Premium Credit Card account remaining in good order.
Previously it stated:
- Free night voucher: On the anniversary of your account opening, so long as your account remains active, you will earn one free night voucher to redeem at any IHG property, provided you make annual Purchases totalling a minimum of £10,000. Annual purchases are calculated from your account opening date to the day before the first anniversary, and thereafter on an annual basis. This offer is subject to your IHG Rewards Club Premium Credit Card account remaining in good order.
It is likely that it was renamed from “Free night voucher” to “Anniversary night voucher” only because the former name is an unfair commercial practice according to Schedule 1 Paragraph 20 of the Consumer Protection from Unfair Trading Regulations 2008, and therefore nothing turns on the name change.
I am guessing that Creation is relying on the terms “so long as your account remains active” and “This offer is subject to your IHG Rewards Club Premium Credit Card account remaining in good order”. One could argue that Creation closed our accounts in order to avoid the cost of issuing this voucher and that by doing so, Creation is not treating customers fairly in breach of FCA rules, in particular PRIN 2.1, of which Principle 6 states “A firm must pay due regard to the interests of its customers and treat them fairly”. One could also argue that these two clauses, if applied to compliant accounts that Creation had unilaterally closed without good reason, are unfair terms and thereby unenforceable pursuant to Section 62(1) of the Consumer Rights Act 2015.
I don’t think that the Financial Ombudsman Service would find that Creation could dishonour the agreement to issue the voucher unless the account closure arose from the customer’s breach of contract, which is not the case here. A complainant could also argue that they would otherwise have used another credit card for this expenditure, perhaps another with a £10k threshold to earn a voucher (e.g. Amex BA).
5. Account fee
Your IHG Rewards Premium Credit Card carries an annual fee of £99, which is applied to your account in the first statement period, and annually thereafter. The annual fee is payable in full in the month it is applied to your account, and if not settled in full by the due date, will attract interest at your standard purchases rate.
There is nothing in this paragraph that allows Creation to refuse a pro-rata refund of the account fee if it decides unilaterally to close an account. It’s clearly referred to as an “annual fee”, which implies that it covers a 12-month period. Therefore if the customer doesn’t receive the service for 12 months, then the customer would be entitled to a pro-rata refund of any months in which the service was not provided.
First you need to raise a formal complaint with Creation. It has up to eight weeks to respond. If you are not satisfied with Creation’s response or if Creation does not respond within eight weeks, then you should complain to the Financial Ombudsman Service, which is always free to the consumer, but which will cost Creation a case fee of £750 irrespective of the outcome. It is therefore much cheaper for Creation to honour the voucher and to give a pro-rata refund of the annual fee in all cases.