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.
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 on my Provident complaint page:
- 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.
Can you get a refund from Provident?
Catalogue or card limit too high?
Can a Debt Relief Order help you?
Harry says
I have been waiting since june and still they say there looking into it
jay says
Ive been waiting 12 month, good luck
Chris Bone says
Very interesting. Would be interested to know, and very relevant I feel, whether the “agents” who call at the house(s) are incentivised to issue new loans and/or on basis of weekly collections made. A lot of historic “pop in for a cup of tea” and we’ll get a “Provvy loan for Christmas” with ongoing rapport between borrower and provider which I’m not knocking, but aside from the historical correction required, and as alluded to in the article, the whole model needs to be stripped down including of the course the assessment process over the said cup of tea…easier said than done I suspect.
Debbie says
Its horses for courses!and we’re not popping in for a cuppa as we’re working from home.get your facts right.
Paul says
I used to be a Customer Experience Manager for Provident and we were always pressured into selling new and renewing loans for existing and new customers and our lives were made terribly difficult to a point were we had no choice but to leave. I am glad to see the back of that company
Jayne says
I’ve had 30 loans from provident. I put in a claim in June within 6 weeks they ad written to me twice , the third letter was to tell me they were awarding me £2643. BUT I didn’t get this they awarded me what I owed them and told me in the letter that they had closed my account , as I I was unable to take it further, in my opinion I should of got about £7000 back.
Sara (Debt Camel) says
Then I think you can send your complaint to the ombudsman. You are within the 6 months period.
Richard says
Is there a cut of date of how far back your claim can be for? And also if you have no history of the loans but the company is provident the loans was with do they have to provide the information about your loan history if you ask for it?
Sara (Debt Camel) says
You can’t go back further than April 2007. See https://debtcamel.co.uk/refund-doorstep-loans/ which looks at these complaints in detail. It has a template letter which starts off by asking the lender for a list of your loans.
Joe Crabtree says
I worked as a manager for the provident and my agents were always rigorous at making sure people could afford to pay,(that is why I had no arrears customers)the only people who were on reduced payments were the ones who had a bereavement,unexpectedly off work sick,or something had unexpectedly happened,no extra interest was added (like the banks did)every customer was checked and looked after,in my area!!! 1 had 32agents working for me,l worked 7am till 11pm making sure everything went well,it nearly killed me but my ceo was john van kuffler,and the running of the company is for the customers priority,and will always be. The company was founded by Joshua Waddeylove in Bradford in the 1800s and has been going ever since for people who could not have bank accounts for whatever reason has needed this service. The Provident stands for the people of this country and will always be known for the best home collected credit company.
Sara (Debt Camel) says
Respect.
I have never said every or even most Provident loans were mis-sold.
But not all agents were careful about checking affordability. And too many customers did get caught in a cycle of never-ending loans. eg they needed a loan for school uniform, but the reason they didn’t have the money was they had been paying the high interest on the previous loan.
Janine says
I have had an email from my adjudicator today upholding loans 5 to 24, loans 1 to 4 were pre 2007. I sent my case to the FOS in April 2020 and it was picked up in June. Provident stalled in sending my case file over but this was chased by the adjudicator. I had turned down an offer from provident on 4 random small loans for just over £1000. My refund should be about £13000. I just want to say don’t give up on winning against provident.
Sara (Debt Camel) says
well done.
Provident may delay but they do normally payout on adjudicator decisions at the moment, so fingers crossed they accept yours quickly.
Mrs Sylvia Holmes says
I have had numerous ammounts of loans of provident.i have been with them for about 30yrs snd when I put in for ppi they said i had passed the deadline so couldnt put in for it .but i didn’t hear about it till late it wasnt advertised very well
Sara (Debt Camel) says
I don’t think Provident normally charged PPI?
But if you had a lot of loans from Provident then you may be able to make an affordabilty complaint. That is very different from PPI and there is no deadline on making this type of complaint. If you win this sort of complaint you get back a refund of the interest you paid. You can win even if you paid all the loans on time.
Read https://debtcamel.co.uk/refund-doorstep-loans/. This explains what an affordabilty complaint is and has a template letter you can use if you think Provident gave you unaffordable loans.
Karen says
I had a provident loan about 10 yrs ago I’ve put in a claim just kept getting emails bk saying ‘”thanks we’ve got ure email ” and that was it for a while then I said if not sorted out I’m going to financial ombudsman. Soon got them moving but they keep asking for my agent’s name which I can’t remember…feels like they are stooling
Sara (Debt Camel) says
If you only had 1 loan 10 years ago you are pretty unlikely to win this.
But if you had more, send the case to the Ombudsman if this is over 8 weeks. As you can see from the article above, provident are often making very low offers so the Ombudsman has to look at it anyway – so the sooner you get your case there the better.
Elaine says
Just had an email from FSO advising Provident to repay interest plus interest to my Mother on 44 loans, by the dates she 5 loans at the same time, they have until 21st September to respond, interest alone is about 30k.
Sheree says
27/07/2014 700.00 charges 574.00
20/12/2013 500.00 charges410.00
11/11/2011 200.00 charges 150.00
08/08/2011 400.00 charges300.00
29/10/2010 300.00 charges225.00
14/09/2009 300.00 charges225.00
24/07/2008 200.00 charges136.00
Hi what’s the chance of winning this been 8 weeks still no update just saying they’re investigating. I couldn’t afford it and a missed payments quite a few times or would pay 2 pound a week especially on the last one for weeks on end. Paid all them off some paid regularly but still struggled, only the last one I only paid about 160 on then it got sold on. Any advice please
Sara (Debt Camel) says
What were the “gaps” between the loan – the time from raping one loan to taking out the next. Sometimes it may have been the same day.
What has happened to the last loan, have you paid it off with the debt collector?
Sheree says
15/09/2009 24pound balance left took out another loan same day
15/09/2009 £300.00 loan
02/11/2010 46pound left took out a loan same day
02/11/2010 300.00 loan
09/08/2011 it says 211.11 collection then On the column underneath 8.89 esr
09/08/2011 400.00 loan
23/12/2013 17.00 left took o it a loan same day
23/12/2013 500.00 loan
28/07/2014 387.22 left took out loan same day but then The next column below says 29/07/2014 72.78 esr?
29/07/2014 700 pound loan
I didn’t pay all the last loan off I only paid 169 of it before it was sold on. On all of my loans from the first one I missed payments regularly and a quite a lot on most of them I paid 2.00 or 5.00 a week if I didn’t miss it. And took out the new loans to pay off the other ones even if a small but left and gwhy were stretched o it far longer then they should’ve been because I wasn’t paying them or paying a tiny amount
Thankyou
Sara (Debt Camel) says
so that was continous borrowing? At FOS you may well get the last 4 loans refunded.
Have you paid off the last loan with the debt collector?
Sheree says
Hi yes I had no gaps between any of the loans. And no I haven’t paid the last loan off it’s with Lowell now. But from day 1 of using Provi I was skipping payments or paying a tiny amount especially after my first two
Sheree says
What would be a reasonable offer?
Sara (Debt Camel) says
as I said, you may well get the last 4 loans refunded if you go to FOS. But it could be more or less. It’s quite a personal opinion what you think a “reasonable” offer would be from provident. I suggest waiting and seeing what they say.
Sara (Debt Camel) says
ok, so I suggest you tell Provident the complaint will go to FOS in two weeks if they haven’t made you an acceptable offer.
laura says
sara wondering if you can help me i have asked provident for a list of my loans theyve said they can only go back to 2012 but i have been taking them from 2008 is there any othet way to get my information so when list came threw it was only from 2012
Akram says
Hi Sara,
I didn’t pay satsuma any money back but on my credit report they have been stating I’ve been paying back £300 per month since Aug 2014
Sara (Debt Camel) says
surely they must be saying that that you cleared the debt a long while ago then?
Akram says
When they accepted my unaffordablity complaint they said they would remove any negative markers from my credit report without saying what exactly. I have asked for either the whole entry to be removed or at least the information corrected to say I wasn’t paying £300 month and it hasn’t been active for all these years. But I think all they will do is mark it as satisfied which will mean having to wait before I can apply for a mortgage. Could I take satsuma to the FOS to remove this from my credit report?
Sara (Debt Camel) says
Did you actually repay this debt, if so when?
If no, how large was the loan and did you have any other loans from satsuma before this?
Akram abu-oun says
No I didn’t and when i won my unaffordablity complaint they wiped out at the amount owed. It was for £300 and this was the only loan I had with satsuma. I took it out in July 2014
Sara (Debt Camel) says
when did you win the affordability complaint?
Akram says
About 2 weeks ago
Colleen says
Hi Sara. I complained beginning of june, i had to keep emailing, and finally got my final response couple of days ago, they said all loans were affordable. I had 23 from 2010 to 2017. I’ve (briefly) added up interest and is around £8000. I emailed Neil straight away and have asked him to look at my borrowing history, and said that it is clear i had become reliant on these loans. I have asked him to re consider the decision. He replied saying that he will look. Is this a good sign? Shall I wait for him to reply and if he says were affordable then refer to fos? Thanks.
Sara (Debt Camel) says
Having emailed him you may as well wait a week or two.
But unless he makes a good offer that looks like an easy decision to go to FOS. With d extra 8% interest you may well get £7-10,000 by going to FOS.
Colleen says
Thanks Sara, so grateful i found this site. I will wait for his reply and keep you posted.
susan says
Does anyone have an address for Shopacheck please? have mailed Provident and asked them to look at my Greenwoods account to but cant find a contact for Shopacheck
Stacy says
Hello.
I’ve sent off the template complaint form and filled in the few bits that I can remember. I had Provident loans for about 4-5 years from around 2011 – 2016 ( my memory isn’t fab! )
The agent used to take into account my ex partners wage at the time – I was a SAHM claiming tax credits etc and he had a full time job. Surely that’s not legal? We never had a joint loan or anything. I used to take out loan after loan, paying back, getting deeper into the mud . It got to the point I would physically shake, vomit and cry and points when she would be knocking on the door.
Me and my ex split, moved out and I haven’t paid back 2 of the loans. Does this hinder me? Its embarrassing to speak about debt – I’m deeply ashamed but, I’m to start again and be debt free.
Any pointers or advice?
Thank you. Good Luck!
Elaine says
Can anyone help with working out the 8% interest on £15950 since loans begins in 2007 please, Thank you.
Sara (Debt Camel) says
when did the loans stop? did they tend to get bigger or much the same size?
Elaine says
Could I email you the loan history from Provident Sarah please.
Sara (Debt Camel) says
no sorry. A rough feel for the dates?
Elaine says
Ok, 2007 interest on loans was £17.50, £30, £390, £150, £658.
sheree olive says
PROVIDENT final response below is that right if i paid off loan before last and last one was 700.00 they say its 1092 and count what they would refund to cover 1092 surely it should be 700? sorry i dont understand it and already with ombudsman help please thanks
Agreement Issued Value Interest Weekly Rate Paid Up
1076715380 20/12/2013 £500.00 £410.00 £17.50 29/07/2014
1092461283 27/07/2014 £700.00 £574.00 £24.50
Interest you have paid towards your account: £337.22
8% interest added on the interest you have paid: £181.92
20% HMRC deduction: £36.38
Refund due after 20% HMRC deduction: £482.76
Your account calculations
Upheld outstanding capital (the original amount you borrowed) balance: £518.00
Upheld interest remaining (that we will write off): £574.00
Not upheld outstanding capital (the original amount you borrowed) balance: £0.00
Not upheld interest remaining: £0.00
Total balance outstanding: £1,092.00
Refund breakdown
Refund Due: £482.76
Total outstanding balance minus upheld interest (Refund to be deducted from
this): £518.00
Gesture of Goodwill write off: £35.24
New payable balance outstanding on your account: £0.00
sheree olive says
Agreement Issued Value Interest Weekly Rate Paid Up
889761407 24/07/2008 £200.00 £136.00 £6.00 15/09/2009
243900695 14/09/2009 £300.00 £225.00 £10.50 02/11/2010
705211442 29/10/2010 £300.00 £225.00 £10.50 09/08/2011
727002862 08/08/2011 £400.00 £300.00 £14.00 24/12/2013
782394988 11/11/2011 £200.00 £150.00 £7.00 24/12/2013
1076715380 20/12/2013 £500.00 £410.00 £17.50 29/07/2014
1092461283 27/07/2014 £700.00 £574.00 £24.50