Provident Financial has announced today that it is withdrawing from doorstep lending after 140 years in the loan business.
In a statement released on the Provident Website, the reason given for the decision was “changing industry and regulatory dynamics” as well as “shifting customer preferences“. The move to stop issuing doorstep lending and loans puts 2,100 jobs at risk.
Provident have stopped lending any new loans, this includes any new loans to existing customers.
However, individuals who have recently applied for a loan or have a loan in progress (and have signed their loan agreement), will still receive their your loan. Provident have issued a comphrensive list of FAQs on their website here.
No, Providents SOA (Scheme of Arrangement) is completely seperate to this announcement.
Provident Financial are looking to introduce a scheme to limit compensation paid to customers who were mis-sold loans, in a move similar to gurantor lender, Amigo Loans. Provident are looking to introduce a “scheme of arrangement” to deal with a flood of complaints from customers who have been mis-sold loans. The scheme would reduce the amount it would have to pay to customers to settle their complaints.
The scheme comes after Provident announced that it couldn’t carry on paying refunds to customers for mis-sold Provident Home Credit Loans and Satsuma Payday loans. This is simply due to the volume of customer complaints and their validity.
The Financial Ombudsman (FOS) have been upholding 75% of customer complaints against Provident, in addition to the Financial Conduct Authority investigating Provident’s affordability assessments and complaint handling since February 2020.
In sheer volume of customer complaints, and the involvement of the FOS and FCA, signal that many of the loans taken out from Provident, Glo, Satsuma and Greenwood, where unaffordable, and the right checks were not made before the relevant loan was issued.
Visit our blog post to discover more about Provident’s Scheme of Arrangement.
If you have already made a claim to Provident for a mis-sold loan, or are a current Provident customer, they will be getting in touch with you via email or letter. A copy of this letter, can be found on the Provident website here.
If you have not yet made a claim to Provident for a mis-sold loan, you still can, however, Provident will not be working on any new claims, until they know the outcome of the scheme. If the scheme is approved, you will have to resubmit a claim under this scheme.
Whilst we wait for news on Provident’s Scheme of Arrangement, either way, we will keep you fully informed and up to date.
If you have experienced being mis-sold another type of financial product, a Guarantor, Payday or Doorstep Loan, PCP Car Loan or Catalogue Card Credit, we can help. We want to help you get the compensation you deserve, before any other schemes pop up!
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