Provident confirms payouts for borrowers – but they'll get back less than 10% of what they're owed
Provident borrowers who were mis-sold loans they couldn't afford will receive refunds of some of the interest and fees they were charged this July, it's been confirmed. But they'll get back less than 10% of what they're owed.
Update: 5 July 2022: Provident has confirmed that redress payments for mis-sold loans will be capped at 4.25p for every £1 owed. The lender had previously said payments would be capped somewhere between 4p and 6p per £1 owed.
The lender says redress payments for mis-sold loans will be capped at just 4p to 6p per £1 owed, meaning borrowers who took out loans between April 2007 and 17 December 2020 (the date Provident decided to set up a legal redress programme for mis-sold borrowers known as a 'scheme of arrangement') will get back less than 10% of what they are owed. These payments will be made in July.
The announcement comes after a High Court judgment in August 2021, which granted Provident permission to cap total payouts at £50 million. It's unclear how many borrowers will receive refunds, but Provident had 4.2 million customers in the period covered by the scheme.
PFG, which includes Glo, Greenwood, Provident and Satsuma, provided short-term guarantor, doorstep and payday loans, charging interest as high as 1,557.7% APR to borrowers who struggled to access standard credit. But it's been hit hard by mis-selling claims for incorrectly-issued loans and permanently closed on 31 December 2021.
At the time of its closure last December, Provident wiped tens of thousands of existing customers' loans, saying it would no longer collect repayments – though it continued to accept mis-selling claims until 28 February 2022.
I think I was mis-sold a Provident loan, what do I do?
- It's now too late to submit a new mis-selling claim for loans issued before 18 December 2020.
A dedicated claims portal for those who believed they had been mis-sold to before 18 December 2020 closed on 28 February 2022.
If you submitted a claim, you would have been asked to include the contact details you used when you took out your loan, and these will be the details that will be used to provide updates. Provident told us it has begun to contact affected customers with everyone impacted expected to be contacted by June 2022.
If you've received your decision and you're not happy with it, you have 30 days to ask for it to be reviewed by the independent "scheme adjudicator" overseeing Provident's redress programme. The best way to do this is via the online portal, though you can also call the contact centre on 0800 056 8936. You'll need to provide evidence for your appeal, demonstrating why you don't agree with the decision that's been made.
Those unhappy with their final response from Provident will not be able to take complaints further because the Financial Ombudsman Service says it won't take on complaints where there is a court-approved redress scheme in place. However, if your complaint isn't about unaffordable lending, you can still escalate your complaint to the ombudsman, because this is not covered by Provident's redress scheme.
- If you think you were mis-sold a loan on or after 18 December 2020, you can still submit a complaint to Provident.
Call its complaints helpline on 0800 121 8034 or use its online complaints form. Here, your complaint will go through Provident's normal complaints procedure outside of the separate scheme of arrangement.
This means if you're not satisfied with Provident's proposed resolution, or eight weeks have passed and your issue has not been resolved, you can refer your complaint to the Financial Ombudsman. Read our full Financial Ombudsman guide.
Provident has offered to honour out-of-date refund cheques, should I accept?
Provident will honour any out-of-date refund cheques sent prior to it setting up this latest redress scheme – you just need to request a replacement cheque if you've not already done so.
If you're due money under the new scheme and have already received and cashed in a cheque, Provident will simply deduct the value of the cheque from the total amount of redress due. So for example, if you are due a refund worth £1,000 and have a cheque worth £500, Provident will subtract £500 from the total compensation due, before working out your redress payment – in this case, 4% to 6% of the remaining £500.
What if I've been mis-sold a loan from a different lender?
If you think you've been mis-sold a short-term loan, including payday loans, you can make a complaint for free yourself. We've included a brief summary, with links to our complaints tool below, but you can also see our full Payday loan mis-selling guide for more info:
- How do I know if I can make a claim? Lenders must examine your finances to ensure you can afford the loan and fees. If, as was common, that wasn't done properly and you shouldn't have been lent the cash, or the costs or the repayment timetable weren't clear, you were mis-sold. See our checklist for more help.
- You needn't pay a claims firm – use our FREE TOOL. Claims firms can take 25% + VAT off your claim, so instead use this quick link to our tool (available via complaints site Resolver). Enter your details and it helps draft the complaint, sends it to the lender, keeps track and escalates to the ombudsman if you're rejected. Or you can use our template letter to do it yourself for free by email/post.
- Don't delay – you could get MUCH less if your lender goes into administration. Dozens of short-term lenders have gone bust, including big-name payday lender Wonga, leaving customers with legitimate claims getting significantly reduced payouts – or even finding it's too late to make a complaint. See what to do if your firm has gone bust.