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 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?
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
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
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.
Anne Goodfellow says
gives me hope as ive been wsiting dince augudt for outome by provident today i received a psrtial.upheld claim been offered 200 pounds !! from loans since 2007 and only two uphrld the modt recent ones from 20 14 which were thevsmallest one for 600 and one for 400 which have been sold to lowell.debt collectors in 2014 and im.still.psying back.every minth to put tnis in persepective in total.without these two the interest i have paud back.and clearedl.i interst i paid back in full £4127 x 8 percent £ 330 x 13 yrs = 4290 add 2 together = 8487 . minus the 1000 balancs they sent to debt compsny lowell and rhey have 0fffered me £200
: all they wrote off is 600 and 400 loan so thats 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 anyine know what time frame for the ombudsman decision to be advised plesse thanks Annie
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.
Nigel says
I have just lodged a complaint last week with Provident, as I recently only just found out that you could complain about unaffordable lending. My loans with provident stretch back to early 2002 till around 2014. I received an email from the complaints department yesterday 01/02/2021 asking me if I had any evidence to support my claims while they investigate. In 2010 to 2012 I was also using other payday lenders and have just been recently been contacted by the administrator who are working on behalf of quick quid which has now gone bust. Part of these loans were upheld and some rejected. Should I use this as evidence? I also used your letter template and requested all the loans that I had with provident, should I again ask for these and then ask for my response to be extended so that I can rely in more detail to back up my complaint as they have only given me 10 to respond or just leave it and let them investigate. I know I only can go back to 2007. I have also since moved on a number of occasions so most paperwork and loan books were thrown away.
Any advice would be most appreciated.
Sara (Debt Camel) says
You don’t have to do anything. It isn’t clear if Provident pay any attention to what you send them – often their decisions seem pretty random!
I would not suggest you ask for any extension, the last thing you want to do is delay thus process.
Nigel says
Thanks Sara that’s great.
I still haven’t received a breakdown of all the loans that I took out as stated in your very helpful template letter. Do I give them time or atrat chasing this with them.
Sara (Debt Camel) says
You could reply you are still waiting for the list if your loans.
Leelee says
Hi as an existing customer I
Recently sent in complaint to provident asking for refund on all loans I had took out over the years, I never had customer number which I told them I no longer had but gave them all information needed to locate account also gave my collectors name & 4 times they’ve sent me email requesting customer number, may I email I sent them I told them my mother & sister recently complained never had customer numbers, sisters had offer but refused & mum has also had reply from them, anyone know I can just go straight to ombudsman???
Nigel says
I had the same situation as it was around 2014 I last took a loan and since moved. They should be able to find you from either previous/current address and Date of Birth. I had the same problem as they said they could not locate me as I gave my current address instead of previous address where the loan was taken out at. Once I sent my details I received an email with my complaint reference number. Hope this helps.
Leelee says
Hi thanks for reply, I did make the mistake by giving them my address when making complaint
but after they contacted me asking for previous address I then remembered my Collector had me down at mums address when she signed me up for account it was opened without any checks done to prove that was my actual address, so I gave them the information requested & they’ve sent 3 more emails asking for address that I’ve sent back 3 times 😡
Lisa says
I put my Complaint into Satsuma Provident February 2020 and finally received a reply Friday. They’ve accepted the finding of the FOS. They have said they will make the offer to me direct and not to the FOS. I take it this will be a lesser offer than the FOS suggested. Has anyone else had this.
Sara (Debt Camel) says
If they say they have accepted the adjudicator decision the offer should be in line with that, not lower.
Claire says
Yes they told the ombudsmen they will accept the ombudsmen decision and contact me with a breakdown.
No letters or email then I have today recieved a cheque for a much lower amount. I am fuming it looks like they have hood winked the ombudsmen.
I have contacted my ombudsmen case manager as she told me to report any problems.
Sara (Debt Camel) says
had they previously send you another cheque?
Debra says
Hi
I sent the template letter and Provident have sent me details of all my loans.
I have replied and asked them to make me an offer that I can consider.
I’ve paid over 3,600 in interest, what is the average offer I can expect?
If I don’t like the offer do I just inform Provident that I am going to ask the FO to look at my claim?
Regards
Linda says
Hi
Ive got an ongoing complaint with morses/shopacheck. Ive accesed my credit report and found these
Date. Monthly term
21/07//2018 0 @ £108
24/06/2018. 0 @ £75
21/11/2017. 0 @ 108
16/05/2018. 12 @ £75
24/01/2017. 7 @ £58
18/10/2016. 22 @ £60
29/06/2016. 7 @ £64
07/04/2016. 12 @ £75
05/01/2016. 12 @ £45
08/10/2015. 12 @ £60
23/04/2015. 11 @ £0
20/01/2015. 7 @ £0
15/01/2015. 11 @ £45
15/01/2015. 11 @ £0
21/11/2014. 11 @ £0
21/11/2014. 11 @ £60
24/11/2014. 11 @ £0
Can anyone tell me why some are shown with £0 please I dont understand it
Thanks Linda
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.
Kerry says
Provident can’t find any of my loans on a previous address in my maiden name but found loans in my current address In my married name. What can I do? I know I had more loans in my old address. How have they not got that information?
Sara (Debt Camel) says
All you can do is send your complaint to the Ombudsman. Sometimes other loans seem to turn up when FOS gets involved.
Laura says
I am in similar position. Provident are only saying they can find my 4 loans since 2016. I had about 10-15 loans from 2006-2016 and they are not acknowledging them. My case is with the ombudsman and they have said if I can’t find proof my end there is nothing they can do. So I am guessing Provident are using this to their advantage. So I think many of us will be in the same boat unfortunately.
Kerry Mullinger says
Surely that’s all provident have to do now is not acknowledge the loans so they don’t have to pay how is this fair? They should have all the loans on file not part of them. I’ve even told provident my old providents name. Surely they have all the loans she gave out on file? Doesn’t make sense, I guess this is the start of them not finding loans to get out of refunds!
Laura Kilgariff says
Yes there doesn’t seem to be much we can do if they say they can’t find our records. They are now basing my claim on only those loans and nothing I can do about it.
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
Claire says
Hello does this seem right Sara?
My last contact with the ombudsmen was that provident will be in touch about my refund as provident have agreed to uphold my complaint. I emailed the ombudsmen back and said ok that’s great news. So I have been waiting for provident to send me a breakdown of what I am owed according to the ombudsmen direction.
Today I recieved a cheque in the post for a much lower amount than I calculated with no explanation as to what will happen to my loans that were sold to collection agencies.
Anne Goodfellow says
can anyone give time frame out in claim july 2020 to prov finally got offer on jan 9 th for ludicrous amount that made no sense and upholding 1 out of 9 and only the newest one.claims team sent to fos on 12 th jan as priority case due to health issue supported with health evidence and financial priorty bill issues impacted as well .what wait time roughly in months should i expect thank you
Kat says
Anyone know how long it takes to receive a offer/cheque ? We’ve had the email to say that they have agreed with the ombudsman and that they will contact us with a breakdown but nothing since ?
Linda says
Hi
Not sure about when its been to the ombudsman as mine is with them at the min, but when I got my first offer off provident, I had it within 2days of the offer. I hadn’t even accepted the offer they just sent it out to me
Anne Goodfellow 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.
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
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
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