People who were sold loans they could not afford to repay by Provident will get back less than 10% of what is owed to them, it has been confirmed.
The lender said repair payments will be capped at 4-6p per £1 owed by the company, meaning someone who owes £500 will only get £20 back. Borrowers eligible for the payment – which will be made in July – will have had to take out loans between April 2007 and December 17, 2020, the date on which Provident decided to set up a legal recourse program for mis-sold loans known as of ‘scheme of arrangement’.
The announcement comes after a High Court judgment in August 2021, which granted Provident leave to cap total payments at £50million. It’s unclear how many borrowers will receive repayments, but Provident had 4.2 million customers during the program period.
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Provident Financial Group (PFG), which includes Glo, Greenwood and Satsuma as well as Provident, provided short-term guarantor, home loans and payday loans, charging interest of up to 1,557.7% APR to borrowers who struggled to access standard credit. It was hit hard by mis-selling claims for mis-issued loans and closed permanently on December 31, 2021. During its closure, it wrote off tens of thousands of loans from existing customers, saying it would no longer collect refunds.
It is now too late to submit a new mis-selling claim for loans issued before December 18, 2020, as the window closed on February 28, but you can still file a claim if you believe a loan has cheated you. wrongly sold on or after December 18. 2020. To do this you will need to call their complaints helpline on 0800 121 8034 or use their online complaints form here. In these cases, your complaint will go through Provident’s normal complaints procedure outside of the separate plan of arrangement.
If you submitted a claim for a loan taken out prior to December 18, 2020, you would have provided the contact details you used when taking out your loan, and Provident will use these details to contact affected customers, with all affected persons to be contacted by June. 2022.
If you have received your decision and are not satisfied with it, you have 30 days to request that it be reviewed by the independent “Plan Arbitrator” who oversees Provident’s Recourse Program, either through the online or by calling the contact center. on 0800 056 8936. You will need to provide evidence for your appeal. Those who are not satisfied with their final response from Provident will not be able to pursue their complaints because the Financial Ombudsman Service says it will not take up complaints where there is a court-approved redress system. But, if your complaint is not about unaffordable loans, you can always escalate your complaint to the mediator.
Provident said it will honor any stale refund checks sent before this final remedy program was implemented, but customers will need to request a replacement. If you owe money under the new plan and you have already received and cashed a check, Provident will simply deduct the value of the check from the total amount of repairs owed. So if you owe a refund of £500 and you have cashed a check for £100, Provident will deduct the £100 from the total compensation due, before calculating the repair payment – 4% to 6% of the remaining £400 .