Doorstep lender Provident plans to limit compensation claims for mis-sold loans – are you owed money?
DOORSTEP lender Provident wants to limit the amount of compensation borrowers can claim over mis-sold loans.
The high-cost creditor said it's planning to create a £50million pot of money to make payouts for those who are found to have been irresponsibly lent to.
But this is less than the compensation claims are worth.
Provident is seeking to cap the amount of compensation it has to pay borrowers who were given loans they could not afford to pay back.
The lender has proposed a scheme of arrangement, a legal process which would create a fixed pot of cash for compensating borrowers after a surge in complaints about Provident.
The lender has already paid out millions of pounds in compensation.
Wait up to eight weeks to hear back from them. If you're not happy with the answer, or they don't get back to you, contact the Financial Ombudsman.
The complaints concern loans made between April 6, 2007 and December 17, 2020 through Provident and other brands it owns: payday lender Satsuma, Glo and Greenwood.
Anyone who took a loan out during this period with these lenders or who acted as a guarantor on a Glo loan may be entitled to make a claim.
The more than 100-year-old lender said if the scheme is not approved, its home credit business and Satsuma payday loans brand will go under - and borrowers could end up with nothing at all.
Glo and Greenwood are no longer trading.
Speak to one of these organisations - don't be tempted to use a claims management firm that will claim it can write-off lots of your debts in return for a large up-front fee.
But if Provident's home credit business and Satsuma go under it's likely they won't get anything at all.
Sara Williams, the founder of Debt Camel, said: "Provident is only putting £50 million into the post for refunds to its customers, past and present.
"Not all will make a complaint and not all will have their complaint upheld, but it still looks as though people are going to get a tiny refund.
"This is a disgrace. The FCA is failing to protect the customers, many of them vulnerable, who were trapped paying Provident's high interest loans for years."
Separately, Provident said it is being investigated by the Financial Conduct Authority (FCA) over the affordability of its loans, as well as its complaints handling process between February 2020 and February 2021.
The high cost credit sector, including guarantor and payday loans, has taken a hit in recent years with mis-selling complaints forcing many lenders, such as Wonga and Piggybank to go bust.
Amigo Loans last June said it was being investigated by the watchdog over concerns it may have lent to people who couldn't afford to repay loans.
Car finance provider Moneybarn last year repaid more than £30million to almost 6,000 customers after letting them take out loans they couldn't afford.
Moneybarn and doorstep lender Provident are both owned by the same company, Provident Financial PLC.
Around 2.3million BT landline customers could be given up to £500 each in compensation following a court case against the telecoms giant.
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