The Financial Ombudsman (FOS)’s latest quarterly statistics, published on 25 August 2020, highlighted a rise in the number of complaints received about some types of high cost credit. In the period April-June 2020, new complaints about home credit rose by 77% to 1,166.
UPDATE in the second half of 2020, FOS was sent over 10,000 new Provident complaints!
Provident is the major lender in the home credit market, also known as doorstep lending. When Provident published its results for the six months ending 30 June 2020, it reported an increase in complaints during 2020 but did not give numbers.
In this article, I look at how Provident is handling affordability complaints.
If you have borrowed a lot from Provident, read A template letter to ask for a refund from Provident and think if you have a case to make a claim. There are thousands of comments below that article, so you can see how other people are getting on with their complaints.
Contents
Background – affordability complaints
The regulator’s rules say a lender has to make appropriate checks that a loan is affordable for the borrower. A loan is only affordable if the customer can repay the loan without having to borrow more money or get behind with their other bills and debts.
The current regulator is the FCA, but this duty to check affordability also applied before 2014 when the Office of Fair Trading (OFT) was the regulator.
If a lender rejects a complaint, the customer can send it to FOS for a decision.
If a loan is small, FOS would not expect a lender to make detailed checks. But one of the things it looks for is “re-lending”, where a lender keeps giving loans to a customer, as this can be a sign that the loans may be making a customer’s position worse, not helping them.
From 2015 increasing numbers of affordability complaints have been made first about payday lenders and now about other sorts of high-cost credit. Doorstep loans often involve prolonged re-lending. The FCA found that in 2015-17:
74% of home-collected credit consumers spent up to 12 months in continuous debt and around 10% had 12 or more loans.
and the recent PWC report said:
its use becomes habitual with customers relying on it as a source of income.
The standard affordability rules apply to Provident
Provident sometimes seems to suggest it is a special case, that the affordability rules are different, or matter less, for doorstep lending. It isn’t clear why.
When the FCA rejected calls for a limit on refinancing for home-collected credit, it noted that its rules already say that lenders must assess affordability before agreeing a new loan and must not encourage unsustainable refinancing. So the FCA was saying that the normal affordability checking rules apply to Provident.
The FCA’s recent review on re-lending was addressed to all high-cost credit lenders, including home-collected credit. It said:
We remind firms of our Dear CEO letter from October 2018, sent to all [payday lenders] (but which equally applies to other firms in the high-cost lenders portfolio). In that, we highlighted the risks in relation to repeat borrowing given that it could indicate a pattern of dependency on credit that is harmful to the borrower. Rigorous affordability assessments are key to avoiding harm in this area, and firms should ensure they are making proportionate and responsible assessments of the sustainability of borrowing.
Provident also points out its customers don’t need to take new loans if they are struggling as they could ask to repay more slowly, with no added interest. Provident said recently in a response to a customer’s affordability complaint:
I would like to highlight that had your Agent been aware of your financial difficulties then this would have been considered prior to issuing any further loans as it is not beneficial for you or Provident to issue loans knowing repayments cannot be maintained.
If you were unable to maintain your repayments your Agent would have been happy to make arrangements to suit your circumstances. Provident do not add additional charges or interest to loans when payments are missed, so a payment arrangement would not have increased how much you would have to pay back to us – this flexibility would also mean you could meet other priority expenses knowing you were not being financially penalised by us in doing so.
Debt advisers know it is usually simple to get Provident to accept a lower repayment offer. The problem is that many customers have no idea about this… Instead a customer who needed more money might be offered refinancing or an additional loan by their agent.
But in any case, a friendly approach to forbearance is simply not relevant to whether a lender made a proper lending decision for a loan. That would be like arguing that it is OK to break a speed limit because your car has very good brakes.
Provident’s complaint handling
FOS decisions
FOS describes how it looks at affordability complaints in general in its page on Unaffordable lending.
In August 2020, the Kerrigan v Elevate judgment decided that if a lender breached CONC rules on affordability assessments, this was likely to constitute an unfair relationship under the Consumer Credit Act and redress could be a refund of interest paid on loans, which is what FOS typically orders if it upholds an affordability complaint. Although the lender in the case was Sunny, a payday lender, the arguments in the case seem to apply equally to other types of loans.
FOS has given hundreds of adjudicator decisions on Provident cases. And in March 2020 it published a Key Decision for a Provident case, setting out the legal and regulatory background in detail.
These Provident decisions largely follow the pattern of payday loan relending cases, with the first few loans being not refunded as the lender did not have to make detailed affordability assessments, but after a certain point the lender should have looked more closely. If detailed checks on the customer’s income and expenditure would have shown the loan was unaffordable, then the customer should be refunded the interest paid. If loans carried on without any significant break, then after some point all later loans may be assumed to be unaffordable.
Provident falls into line with the FOS approach in 2019
The FCA’s DISP rules explain that lenders should learn from FOS decisions:
DISP 1.3.2A These procedures should, taking into account the nature, scale and complexity of the respondent’s business, ensure that lessons learned as a result of determinations by the Ombudsman are effectively applied in future complaint handling.
But in 2018 and 2019 Provident was dismissing or making very poor offers to most complaints. These were not in line with FOS decisions, as is shown by the fact that customers have been winning about 85% of Provident cases. And in 2019 Provident rejected many FOS adjudicator decisions, leading to a backlog of cases building up.
Then in late 2019/early 2020, Provident settled all its outstanding FOS cases in line with typical adjudicator decisions. Here is one customer’s settlement:
But in 2020 Provident’s complaint handling is back to being poor
After clearing the FOS backlog, I had hoped that Provident would continue to settle new customer complaints using the same approach that FOS would. And Provident’s latest results said:
an increasing proportion of complaints are being managed internally, reducing referrals to the FOS.
Which sounds good.
But unfortunately, some people with strong-sounding cases are reporting being given rejections or poor offers. Here are a couple of recent comments:
- In total I had 15 loans totalling £14,200, the interest charges were £14,063. They have offered £3670.03 (inc 8% interest). I think this amount is far too low as they have only upheld 5 loans (2,3,7,8,9) which were all of relatively low balances.
- I had 45 loans in total with interest amount of 16,173.98. I think their offer of £5,125 is low and random. They have upheld my complaint for 11 of the 45 loans. I can’t work out how they come to decide that loans 5,6,7,12,13,17,18,29,34,43 and 44 were unaffordable but the rest were affordable.
Those are not the sort of decisions you would expect FOS to make. In one case, in the middle of a string of loans Provident upheld a £1000 loan but decided the next loan for £2500 was affordable.
The FCA’s DISP rules say a firm should:
explain to the complainant promptly and, in a way that is fair, clear and not misleading, its assessment of the complaint, its decision on it, and any offer of remedial action or redress
but in the recent decisions, Provident is not setting out why it has selected some loans for a refund but rejected others as being affordable.
When Provident sends a response to a complaint, it usually also send a cheque for the calculated refund. If the customer cashes the cheque, this is accepting the settlement offer so they can’t take their case to FOS.
A fair way to handle complaints?
From readers’ comments, it seems that some Provident offers are poor and the letters, although lengthy and full of figures, don’t explain why some loans have been excluded. People may think their case has been assessed properly so there is no point in taking it to FOS.
And many Provident customers are in a vulnerable situation, on a low income and finding money hard to manage. The temptation to cash the cheque may be impossible to resist.
I think the FCA should look into Provident’s complaint handling. If it decides Provident’s offers have been systematically too low, it should tell Provident to re-assess the previous offers and pay a higher amount.
Comments on this page are now closed.
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kim says
I hae just had a response from FOS to say they have written to Provident with the decision 8 loans should be repaid, it states they have until 10th Feb to reply, will they do this willthey reply befre the date give by FOS, and whats the likely hood they will agree to the FOS decision.
Total £11,250.00 in loans, one from 2010 and the rest raging from 2011 to 2013, any one know how they work it out roughly, these loans were my elderly fathers, we never knew he had been getting them… any rough calculations be great I believe theyve to refund all interest and 8% on top thanks …. Oh and I only applied in July 2020, so its not been too long
Anne says
gives me hope as ive been waiting since august for outcome by provident today i received a partial.upheld claim been offered 200 pounds !! from loans since 2007 and only two uphold the most recent ones from 20 14 which were the smallest ones for 600 and one for 400 which have been sold to lowell.debt collectors in 2014 and im.still.paying back.every month to put this in perspective in total. without these two the interest i have paud back.and clearedl.i interest i paid back in full £4127 x 8 percent £ 330 x 13 yrs = 4290 add 2 together = 8487 . minus the 1000 balances they sent to debt company lowell and they have 0fffered me £200
: all they wrote off is 600 and 400 loan so that’s 1100 offering me 200 compo si effectively 1300 in total out of 8487 thats not ok at all.so i have rejected it put the 200 pound cheque in the drawer its valud for 6 mths .does anyone know what time frame for the ombudsman decision to be advised please thanks Annie
Mike D says
Hi Kim
I’m in the same boat. Provident agreed with the adjudicators opinion and will issue redress in line with his recommendations. Once you reply to the adjudicator and they convey your acceptance to Provident, they have 28 days to get in touch with a breakdown of the redress you are owed. I hope a cheque arrives at the same time. If it doesn’t add up, get in touch with your adjudicator. Roughly, the calculation should be: Total interest/charges/fees from the refunded loans plus 8% interest simple, minus ESR (only applicable if you paid off the loan early), minus tax which is payable to HMRC. Sorry if that’s as clear as mud but it’s something along those lines. Good luck going forward. Mike
Rhona says
What percentage is due to HMRC I’m awaiting refund
Sara (Debt Camel) says
Only the 8% part is taxable, not the refund of interest.
Are you a basic rate taxpayer?
Jock says
I didn’t have much loans with them but they offered me £100 back which was ment to be sorted out before Christmas, can’t even get a answer from them, as stated I only had a couple of loans, so thought what the hell, they said here’s a £100… Still not recieved its now February…
Sara (Debt Camel) says
Have you phoned them up and asked what is happening? Say your complaint will go to the Ombudsman if they don’t pay you what they said within 3 weeks.
Amie says
Hi, I received an email the other day from FOS saying what they think is fair and what provident should do about it. Provident have also got until the 10th Feb to reply with any further information. I’m also wondering if provident do get in contract within the time frame or if they they drag their feet, I’m guessing drag their feet lol. It’s been going on since July 2020.
Anne says
can i.ask how long was your complzint with tjr ombudsman before they contacted you with outcome i raised complsint via claims management compsny provident sent me letter anf cheque on saturday for 200 pounds which i have refused and only up held the very last loan ehich was the smallest and with a debt agency all other :8 were rejected from 2007 up to 2013 so im.not accepting as how can one be accepted but alll others rejected .they stated i had an eccellent credit rating which i.didnt have i wish if i had i could have got a. ormal.bank.loan .they said agent wasnt aware i was struggling and cant prove or disprove as it was door sales etc all rubbish as i kept bortowing to clear one to then offset and so on 8 times once 3 timrs in one yr and simetimes agent filled tje paper work in for me i was made refundant twice during this time scale and agent new that Nd took huge drop in incime when i finally got a job with sky .it seemed like a standard letter where they just lotted in my loand details so confusinh with tje charges ive pId plud intetest its 8104 and i cleared all but two.of the lows by borrowinh
Amie says
Firstly I complained to provident via resolver, unfortunately provident never came up with a decision and just used to email me saying they were still looking into my case but hadn’t reached a decision so when the time came to take it to the FOS I did, I’m pretty sure that was October time last time. Then last week they emailed saying they had got everything they needed to look into my case (provident didn’t rush in providing them with my case file) and they stated in the email what provident should do to put things right. They sent me the file that they had sent provident but the adjudicator also stated that both parties could add anymore info at this time. Provident have got until the 10th of Feb to give a response to what the adjudicator thinks is fair. It is a long winded process and will continue to be that way for a while yet because provident won’t rush form the looks of it they never do.
Joanna says
I had 8 loans 6 payed off in time last 2 are still being repaid but I only pay minimum due to first furlough since last March and then I lost my job in October due to Covid redundancies. I have only £569 to pay I sent them official letter asking for debt to be written off explaining my situation. They responded with an payment deferral option only.
Now they started to ask for payments again my Universal Credit is not even covering my full rent.
I don’t have any other benefits my council refused to help. I’m at the breaking point. I get text messages reminders every day from provident now.
I just don’t know what to do.
Is there anything that I could do?
Sara (Debt Camel) says
Yes, tell them what you have just said here, that your UC doesn’t cover your full rent so you have no money spare for non priority debt repayments. Tell them you will contact them again in 3 months time or sooner if you get another job.
AND with 8 loans, I suggest you also send them an affordability complaint, see the article above. This sort of high-cost borrowing is only meant to be used for short term, not continuously.
AND I suggest you talk to your local Citizens Advice and see if they can help with your benefit situation.
Lorraine says
Ongoing complaint with Provident. After initial complaints letter they sent list of all loans totalling 14 from 2007 onwards. Total amounts to 16700 with interest on top. Most of the loans were taken out whilst on benefits. They used my husbands salary as my income and filled out forms for me to sign. Only loans I actually asked for were the first 3 the rest were all offered/suggested by their agent. Loans were mostly ‘turned over’ obviously increasing amount of interest paid. Provident have refused my complaint for redress (although they upheld husbands). Have now passed to ombudsman.
2 questions.
How long roughly before I hear from ombudsman?
What do people think are my chances of a decision in my favour?
Just to add i had 2 ccjs at the time they were lending to me and am in a DMP for other debts.
I had missed payments with provident along with bounced cheques and I still got the (stock) reply of provident couldn’t see any payment difficulties.
Thank you
Anne says
my claim is with ombudsman provident had sent a cheque for miniscule amount 227.87 what happens if i cash the cheque as money us so tight for me and it will take mths for ombudsmans decision
Sara (Debt Camel) says
When you were sent the cheque, did they say it was in final settlement of your claim (or something like that)?
If they did, you need to ask Provident if you can cash it and still carry on with the FOS complaint. Email joe.sweeney@provident.co.uk and Neil.Iveson@provident.co.uk, give your provident reference number and explain why you are desperate for the money, mention any arrears on priority bills such as rent, council tax, utilities.
Anne says
thank ypu so much i have just emailed as letter does say in full and final settlement the cheque i still have was sent on jan 28 th i rec it in 1st
having similar issue with mr lender rhey are writing off one loan the smallest most recent which is with ssl recivery but declined all others from 2014 onwards to 2018 and doesnt make sense do i raise this now as a complaint with them and ask for sars info to be sent then send ro ombudsnan as this was investigated insitgated by them re the mr lender email tellung me they wwre reviewing some loans from 2014 .ps tjank you for all your help this site is amaxing and im crippled by these and logbook loan i had tjat gas all been paid off but got me into mortgage arrears and council tax arrears so i have raised complaint with logbook loans as well and wldnt even have raised provident comolaint had i not used ypur site so so grateful and will let you know how i get on .i so need this 237.97 as im totally broke and had to.give up employment last may due to.ill.health so things are really serous mortgage arrears council.tax arrears today gas bill.bounced but cant jepordise potential ombudsman decsion .trouble is i havevwaited since last june for provident now its lodged witj ombudsnan for a mth now but wont hear for mths i dont suppose it has been raised as priority due to my health and circumstances
Sara (Debt Camel) says
yes, send Mr lender a complaint now & send that to the ombudsman at 8 weeks. You don’t need to ask for the SAR info first
Tell FOS about your health problems and your mortgage arrears and ask for all your cases to be treated as priority.
Annie Goodfellow says
Thanks so much Sara I called ombudsman and he advised me to defo cash the chq as if they deem my case to be they have paid correctly fine if they owe me more due to ombudsman fundi gs they just deduct the amount of cheque and all calls are recorded. He asked about I essential bills situation and is going to do his best to fast track my case also asked about my medication and my health issue and impact of that so million thanks looking very hopeful. He said most cases they work on at mo are Provident
Jordan Archer says
Hi
I have just had my response from provident saying my lending was responsible, I had about 7 loans with them which I struggled to pay and had to ask my dad to pay off last one.
I have not been offered anything and when I calculated up they owe me over £5000 + 8% interest. I was 18 and worked part time when I had my first loan but my agent kept getting me to top up as she knew I was struggling with money.
Should I send this to the financial ombudsman?
Please help
Jordan
Sara (Debt Camel) says
yes – you know the loans were unaffordable, it’s why you had to keep borrowing
Cj says
So today the ombudsman emailed me to say provident have replied to them and have agreed with their findings..they had til the 8th. To reply ..they have now said once I’ve accepted the offer they will tell provident and then they have 28. Days to refund . So we will see
Amie says
I’m on day 17 of waiting for provident hopefully I hear summit soon. Not overly concerned yet as they have got 4 weeks. It would be nice to see the breakdown of the offer though as I don’t know what I’ll be getting all I know is provident have agreed with the adjudicates findings. I can work it out myself to a certain extent but would rather not in case I work It out to be to high of a figure then I’ll be disappointed if it’s not as much as I thought it would be 😂😂
abdul hussain says
Hi
i have has letter this morning from provident who have agreed with the FOS and have agreed to refund me for two loans from 2012/2013
they stated cheque will be sent seperatly within 14 days. does anyone know if the cheque does come within 14 days or longer. thanks
Linda says
Before I sent mine to the FOS provident made me an offer, I hadn’t even accepted it, and the cheque arrived two days after the offer.
Ryan says
Hi I received same letter Friday/Saturday morning cheque arrived Monday
Abdul says
That was quick, hope mine comes this week.
Cj says
How long did you have to wait for the letter from provident after the fos found in your favour
Amie says
How long have you been waiting for provident to get I touch with you?
Liza says
I wish they’d send me my cheque they’ve gone over 30 days and when I ring them they fob me off saying they haven’t even got a figure to provide. FOS ruled in my favour a month and a half ago. This company have dragged their feet every step of the way since Feb 2020.
Sara (Debt Camel) says
has one of your debts been sold to a debt collector?
Liza says
No I’ve paid them all off.
Sara (Debt Camel) says
ok, that is the normal reason why calculations take longer but that doesn’t apply. Keep at them!
Amie says
Hi, have provident sent your breakdown and cheque yet? They don’t half drag their feet!
Liza says
Can I suggest as this happened to me reply to the FOS that you accept their recommendation /figures I believe this in turn will make Provident send their calculations out. I’d waited over 30 days nothing but was advised this last Friday. Monday I received an email from complaints saying they will provide a breakdown of monies owed to me. Friday I received this now waiting eagerly for a cheque and hope they don’t go into admin before.
Amie says
I’m waiting for a breakdown and cheque providents 28 days are up on Wednesday 17th. Do I just message my adjudicater when their 28 days are up? Also have they said what time frame you will receive your cheque?
Amie says
Did you email provident? If so who do I email?
Liza says
Email the adjudicator and tell them you accept the amount they have stated. This then forces Provident to settle up as I said I wasted 30+ days waiting for Provident to send me their offer. Email sent on Friday to the FOS. Email from provident complaints acknowledging this. Letter with an offer of Friday and just received the cheque today.
It’s taken 13 months in total.
Amie says
I emailed the adjudicater the same day I received an email from her stating that Provident agreed with her and I had to email agreeing this (no figures were issued) so I emailed saying I was happy with provident agreeing to their decision the adjudicator then emailed me saying she’s has left it with provident to contact me within 28 days it will be 28 days on the 17th March. So I have already accepted their offer even tho I don’t know how much it will I just know they agreed to pay interest back on loans 6 to 30. I’m glad you have received your cheque and it is finally over for you. My case has been going on 9 months now and the end is in sight just hope provident don’t delay things any longer than they already have now it’s all coming to an end..
Kelly says
I emailed my complaint to provident mid December. I’ve still not received my list of loans, just the fob off email that they are sorry they haven’t managed to resolve my complaint blah blah blah.
Husband sent his complaint on the same date, yet has had his list and they have refused the complaint saying it was responsible lending and that he’s payment record was ok.. ( beacuse we was always pushed to take another loan !!)
Have now contacted the ombudsman for both complaints.
Feel this could be a very lengthy process.
Annie Goodfellow says
Congrats mine been ongoing since July 6 2020 had this from my claims advisor on Wed so hope it won’t take another 4 mths
hope this email finds you well. I have spoken to the financial ombudsman today just to confirm everything is in progress, and they’ve confirmed receipt of our request to prioritise and are putting it through at the moment. We hope to have an update for you regarding this soon.
Do you know when it was allocated to adjudicator and how long from there it took to get your letter
Joe says
I today received partial refund from provident that are randomly upholding 3 loans from 25. They have offered 1597 saying if I cash cheque it’s as full settlent. I had already forwarded my claim to FOS last week as had no response after 56 days.What I can’t understand is their upholding 3 loans in 2013 however I was given further 2 loans in 2014 which had to be paid through debt management scheme in April 2015. Should I let FOS look into my case as all 25 loans were taken close to each other ranging from 2008 to 2014. I’ve paid 7500 in interest to provident over this time
Sara (Debt Camel) says
That sounds like another very poor offer from Provident. Yes, you are likely to get a lot more bh letting FOS look at the case.
What are your finances like at the moment though? Do you badly need that cheque?
Joe says
I’m in no rush to cash the cheque just now. Its not been sent yet
Annie Goodfellow says
Look at my post I from other day I was in same boat I called ombudsman and you can cash the chq despite what prov say as it doesn’t effect ombudsmam looking at your case what u get awarded they take the chq of final payment. My claims company checked this is reply
I hope this email finds you well. I have spoken to the financial ombudsman today just to confirm everything is in progress, and they’ve confirmed receipt of our request to prioritise and are putting it through at the moment. We hope to have an update for you regarding this soon. Hope this helps
Sharon says
Hi all, sorry for jumping on your post, I filed with the ombudsman about 4 months ago and still have not received any correspondence to say its been received or allocated to an case worker, does anyone know how to get them to treat it as priority? As I am currently not working and my bills like everyone else’s are starting to mount, it’s taken a long time to get to where I am now and I worry that I might end up back where I started with debt if something doesn’t happen soon, at least if thry treated it as priority and I am entitled to anything back of 16 loans it will help enormously with my situation. Please advise how I can do this. Thanks in advance