Provident Financial reveals watchdog probe of home credit division
Doorstep lender Provident Financial has today revealed that it is being investigated by the Financial Conduct Authority (FCA) over its home credit business.
The probe will focus on “consideration of affordability and sustainability of lending to customers” at the division between February 2020 and February 2021.
Provident said that it was aware of the need to address “rising customer complaint volumes” across the division.
It added that the number of complaints to the Financial Ombudsman Service (FOS) across the home credit market increased by around 200 per cent in the second half of 2020.
As part of its own review of the wing, Provident said that it was working on a new customer proposition.
If it is approved, the lender said the scheme would “bring certainty for stakeholders and ensure that customers with a legitimate claim get fair access to redress payments”.
It has set aside £50m to fund claims under the scheme and will also cover further related costs estimated at approximately £15m.
But if it is not approved, Provident said it was likely the division would be placed in liquidation or administration.
The FCA’s probe is not expected to finish until 2022.