Provident cleared for reduced payouts as it closes doorstep lending

© Reuters.

LONDON (Reuters) – British subprime lender Provident Financial (LON:) Group has been given the green light by the High Court in London to pay partial compensation to customers missold loans by its doorstep lending business as it closes it down.

Provident said on Wednesday it had received a court judgment sanctioning its scheme of arrangement, despite concerns raised by regulator the Financial Conduct Authority (FCA) that it would short-change customers.

The subprime lending industry, which lends to people who can’t get a loan from mainstream banks, has faced regulatory scrutiny in recent years and a surge in claims from customers alleging they were sold unaffordable loans.

Provident, which also offers credit cards and vehicle finance, is providing a 50 million pounds ($70 million)compensation pot for doorstep lending customers to cover partial refunds to anyone with a valid misselling claim.

The FCA said it had made clear it did not support the scheme, adding the company remained under investigation for its conduct. However it had previously decided not to oppose the scheme in court because the only likely alternative was the insolvency of the doorstep business.

Malcolm Le May, chief executive of Provident, said: “We believed from the outset that the scheme was fair and that it offered the best outcomes for customers”.

($1 = 0.7187 pounds)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

See also  Virgin Atlantic Airways seeks U.S. Chapter 15 bankruptcy protection

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Please enter your comment!
Please enter your name here