Provident is proposing a Scheme of Arrangement to limit the refunds it has to pay to customers making affordability complaints about provident doorstep lending and Satsuma payday loans.
UPDATE the Scheme was approved in August 2021.
See Provident’s Refund Scheme for how it works and how a customer can make a claim
The £50m the company is putting up to pay refunds is not nearly enough to pay everyone. The whole point of the Scheme for Provident is that it will cost it less than if it were to pay full refunds.
The percentage that is paid out is sometimes called the “pence in the pound” amount. 4% means you are paid 4p for every £ you are owed.
Provident used 10% in its examples
Provident’s Scheme statement includes some examples of what a customer might receive.
In these examples, it assumed that the total of all upheld customer claims to the Scheme would be £500m. The £50m pot of money then means people would get paid 10% of their proper refund value if that assumption is right.
Provident emphasised:
Please note that the above example is not a projection of the actual payment percentage to be paid in the Scheme and is provided purely for illustrative purposes.
But is 10% at all realistic?
Crunching some numbers gives only 1.5%
Numbers are needed for estimates of the possible payout amount. Some of those numbers are known, while for others there is a good indication of the right level. But some figures require an element of speculation:
- the amount of money to be divided. Provident is offering £50m at the moment.
- the number of customers who may have claims. Provident says it is writing to 4.3m customers, current and previous.
- a guess at the number of customers who may claim. Say 20%.
- how many claims Provident will uphold. The Financial Ombudsman (FOS) is agreeing with the customer in 75% of Provident cases.
- an average compensation amount. Allegiant, a claims company that has handled a lot of Provident claims, says their average refund from Provident cases at FOS was £5,303. So say £5,000.
Using those numbers gives 645,000 upheld claims and a total redress amount of £3.4 billion. A lot more than Provident’s illustrative assumption of half a billion.
With £3.4 billion as the total redress amount, a pot of £50m to be divided gives a payout of just 1.5%.
Was the 10% number just invented?
It is possible that Provident just plucked a number out of thin air.
However it has given some information about how it will assess claims in this flowchart. My guess is that it has worked out the assessment process in some detail and it has just removed the key metrics from that flowchart, leaving it rather vague.
In that case, Provident may well have analysed its loans database to work out what the estimated total redress is. If it has, its advisers would probably have suggested using a round number that was fairly close to the calculated one as an illustration.
So perhaps Provident’s number was based on some calculations… but how could they come out with such a large amount?
Is there any way 10% could be realistic?
The assumed number of people claiming makes a big difference:
- say only 10% of Provident customers claim – that looks low but it’s not impossible. Then my estimate of the possible payout would go up to 3%.
- but to get the payout up to 10%, you would have to use a claim rate of only 3% which isn’t at all realistic.
One possibility is that the 4.3million figure for customers isn’t a good starting point because Provident hasn’t kept all their data, so their claims are likely to be rejected. In this case Provident needs to inform people of this.
The only other way to get the payout up to 10% is to either have a much lower uphold rate than FOS does, or have lower redress amounts.
So are some of the metrics in the flowchart decision tree set at levels that will give very different results to FOS decisions?
Provident’s statement says:
Redress Claims will be calculated using a model that has been developed with reference to the 2020 Court decision in the Kerrigan case.
The Kerrigan case looked at the affordability of Sunny payday loans. The judgment was that breach of the FCA’s CONC rules on affordability meant an unfair relationship claim would probably succeed and that the number of loans was relevant. The unfair relationship approach in Kerrigan clearly applies to Provident complaints.
But Sunny loans were generally small and short term – it was common for customers to have more than 20 of them and more than 50 loans in some cases.
Provident loans are much larger and longer-term, so Provident customers tend to have fewer of them.
So the actual loan numbers discussed in Kerrigan do not seem relevant to Provident’s Scheme. If Provident is proposing to use some of the Kerrigan banding to determine claims, that would lead to a much smaller number of complaints being upheld and for fewer loans to be refunded.
Benchmark against FOS
No automated decision algorithm can replicate FOS decisions exactly.
But in administration – a very similar situation to a Scheme – it is normal for the administrators of payday lenders to develop a program that aims to broadly mirror what FOS might do. They do not come up with a program that would systematically refund fewer loans than FOS.
It should be comparatively simple to benchmark an algorithm against FOS. Just take the last 50 FOS decisions and see what the Provident decision would be on those cases.
Conclusion – 10% is a misleading number
So my conclusion is that the “illustrative” 10% figure is misleading for customers. If Provident follows what FOS normally does, then a realistic number is going to be much smaller, possibly about 1.5%.
But is that Provident is planning on upholding a lot fewer loans than FOS would?
If this is what Provident is planning, the FCA needs to explain that it is not an acceptable approach. The FCA should be asking to see the results of a benchmarking exercise against FOS decisions.
I have had to make some big simplifications and assumptions in this article. If Provident provides more detailed figures, I will update this post with them.
What should customers do?
For the latest news on the Scheme now it has been approved, see Provident’s Refund Scheme.
That page is the best place to see what is happening, to leave comments and ask questions.
Comments are now closed in this article.
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Staci says
It is disgusting how the courts allow it with what they have eg other companies etc
Happy to not upset the share holders
But the people who have been keeping them going for years they screw over on refunds
Anita says
I contacted Provident in December with my claim, and when they did respond, they did not acknowledge all of my loans.
I provided the evidence required and have not heard anything back from them, this was at the beginning of February.
Do you think it is worth pursuing at this stage, in light of recent events?
Sara (Debt Camel) says
My guess is they will ignore anything you send them at the moment. But if the Scheme goes ahead, you may as well put in a complaint and try.
do you still owe them any money?
celia tate says
My partner had an email from alliganit this morning basically advising him that any one who received a cheque from provident but rejected it and went to fos should swiftly now bank it
Danny says
I’ve had a claim in since 2019 and still no refund. It’s with financial ombudsman and the cut off date for their decision was 18th March. Typical ! Already lost 3000 in 2 companies going into administration so I’ll get less than 200 back. So this means another 5p for every pound I would have received 😡
Sara (Debt Camel) says
if you have had an adjudicator decision in your favour, talk to your adjudicator.
Danny says
My last message dated the 9th March
Dear Sir/Madam
Thank you for your email.
Please note that we are still waiting for the business to respond with their file.
We have chased the Business for their file.
Once received the case will be assessed by an adjudicator.
Yours faithfully
Julia Pyman│mass claims consultant │
Financial Ombudsman Service│ Exchange Tower, London, E14 9SR
Sara (Debt Camel) says
ok so you are much earlier in the process, nowhere near an adjudicator decision. The cur off date was just for Provident to supply their case file. That is VERY unusual for such an old case.
I am afraid you should assume you are going to get very little back in a Scheme. Of course it is possible that the FCA may force Provident to significantly improve the terms of the Scheme, but that is speculation.
Do you still owe them any money?
celia tate says
I have had one in my favour since February and still heard nothing from provident
Anne says
Danny don’t give up mine also was with them from last year and with fos also yesterday morning I got an email from provident that their was a cheque in the post to me for £14,800 pounds I nearly fell through the floor I too had given up on it .
My advice to you is this ring fos ring provident and nag nag nag them in to action that’s what I have done since 15 th of March and it’s paid off .
I’m disabled and need work done on my kitchen and back garden this will get it done for me now
Deanna Reeves says
My complaint has been with the FOS since November. It was allocated an adjudicator in January and amazingly the illusive Provident contacted me the following day offering me £1255 in final settlement and I have a cheque for that amount sat in my cupboard. I have contacted the FOS regarding cashing the cheque but have had no reply. In light of the new information should I cash it as I may not get anywhere near that under the new scheme?
Sara (Debt Camel) says
See this comment: https://debtcamel.co.uk/provident-satsuma-scheme/comment-page-1/#comment-413599
So you can ask Provident if you can cash it?
Deanna Reeves says
This was what I received from provident when I told them back in January that I would continue with the FOS and asked them what to do with the cheque:-
‘I would advise you to keep hold of the cheque as our final response will not change as it stands. Should FOS disagree with the outcome I have reached, and for instance award further redress, we will calculate any new redress award by taking into account any cheque amount already sent to you.’
Sara (Debt Camel) says
yes, but try asking them now. You may get a different answer.
Deanna Reeves says
Thanks Sara, I’ve just sent them an email. Let’s see what they say.
Christine says
Hi myself and my husband both currently have loans at the moment totalling £400 per month ,do you advise to continue to pay this ,any advice would be grateful.
We can’t afford the £400 , you see we borrowed for xmas, then struggled to keep up the payments so missed a few payments, my hubby received a message from our caller to say she knew we were struggling and could offer us a top up which we did and this is why we are in the position now .
We have had a numerous amount of loans over the the space of approximately 20 years or more ,myself and my husband both,.
Sara (Debt Camel) says
I am very sorry you have only just come across the idea of Provident refunds. For such long borowing you and your husband may have been able to get back very large refunds, but now Provident is trying to set up a scheme where you seem likely to only get a tiny percentage of that as the article above says :(
The best thing you can do now is probably to both send them a complaint – there is a template here https://debtcamel.co.uk/refund-doorstep-loans/. Keep it simple, probably no-one is going to closely look at what you write.
And also to also stop paying them anything at all. Then if your complaint is upheld – and with 20 years of borrowing sounds a strong case! – the amount you owe them will be repaid from your total refund and you will get say 2% of the remaining amount.
For every £400 you pay now, you may only get £8 back in the Scheme – its throwing money away if you have a strong complaint.
If you win your complaint in the Scheme (or if Provident goes into administration, or if something else happens) then any negative marks on your credit record should be removed.
Christine says
Hi sara I have sent them a email using the template on this site on 01/03/2021 ,to which they have replied saying they are looking into to it and will be in touch ,
Sara (Debt Camel) says
Good! Now you have to decide whether to carry on paying them. If you aren’t sure, can I suggest you talk to a debt adviser about this?
Do you have other problem debts as well?
Christine says
Hi sara ,I have just got off the phone from the girl that collects our payments, she has advised me that under no circumstances should I stop paying, she said that I will be receiving a letter from provident as will all customers notifying what to do , we have to go on a portal and request a refund on there ,she said the letters were sent out yesterday so should receive it tomorrow or Saturday.
Sara (Debt Camel) says
she has advised me that under no circumstances should I stop paying
Well she would say that, wouldn’t she! Of course Provident want you to keep paying.
But that is NOT debt advice.
Do you have other problem debts? I can suggest who you should talk to about debt advice including whether you should pay this Provident debt.
Christine says
Hi sara ,I do have other debts and would be very grateful for any further advice you could offer me ,thank you .
Sara (Debt Camel) says
I suggest you talk to StepChange about a possible DMP, see https://www.stepchange.org/how-we-help/debt-management-plan.aspx. In a DMP, you make a single affordable payment to StepChange and they divide it between your creditors. Its not guaranteed but most creditors will stop interest and charges being added, provident certainly do.
StepChange can explain the pros and cons and whether they think you have any better alternatives.
A DMP is a good idea if you are making affordability complaints as it gets you into a safe space where you don’t have to borrow again while any complaints go through. Complaints you win means the DMP speeds up.
Tell them you have submitted an affordability complaint to Provident.
Christine says
Hi sara can I still ask for a rundown of all the loans we have had off provident over the years ?
Sara (Debt Camel) says
yes, but you may not get a response. Also I am not sure it is going to be much help to you?
Angela says
I don’t think provident should be allowed to get away with not paying customers refunds they are still giving out loans to million s of customer s all over the country and making money on the interest my son has issues he put a claim in with the ombudsman 18months ago he is struggling with a debt management plan he has not heard from the ombudsman as yet.
Sara (Debt Camel) says
Has your son had confirmation from FOS they have the complaint?
Did he have previous Provident loans before the current one?
How large are the debts in his DMP and what is he paying per month to the DMP?
Angela says
Yes he had confirmation from fos but no further forward since July 2019 so it seems like provident gets to carry ripping people off still the courts should make all the money maker s fr provident sell there assets the agent use to make his life a misery and he never missed a single payment his debts are roughly 5grand andhe pays 20per mouth so that he never missed his priority bills
my son did have notification from the ombudman before covidlock down last march but it has not heard for them since he does not owe provident any money he paid loans back in full and got behind with other debts because his agent was a bully he took a dmp with stepchange so he could at least pay his proity bills l don’t know why the ombudsman is taking so long to resolve these cases with provident 18months seem along time to wait for at least some response.
Adam Dickinson says
I’m in the same boat. Raised complaint in Dec and have only received the “we’re looking in to it still” email in Feb.
I still owe them money. If I sign up to this scheme to I forgo my complain from Dec?
Sara (Debt Camel) says
You can’t “sign up to this Scheme”. It isn’t running yet and can’t start until end July. The timetime for the Scheme and some FAQs for customers are in here https://debtcamel.co.uk/provident-satsuma-scheme/
If the Scheme does go ahead, you won’t have any option about going into the Scheme – it will be the only way to get a complaint looked at.
How much do you currently owe them? how much are you paying them? And did you have a lot of loans from before?
Darren says
Morning,
I raised a complaint with satsuma in Jan, and got a reply back after 5 days, stating they will look into my complaint, i know this is a generic thing, then another one in Feb for a futher 28 days, however on the 30rd day i received the email ( which is today) about the scheme, i rang them up yesterday and they stated all complaints applied for before 17th march will not be included in the scheme, but i reckon they might of been trying to fob me off….. i have not got any ongoing loans with them…
Sara (Debt Camel) says
they stated all complaints applied for before 17th march will not be included in the scheme
I think there is some misunderstanding here! That is not right.
The Provident FAQs say in this situation:
“You will not need to resubmit your claim again.
Your claim will be automatically entered into the Scheme. We may seek further information from you during the Scheme process in order to determine if you are due compensation.”
Darren says
Hi Sara
Does that mean I will have to wait till the scheme goes thru the court etc to receive any correspondence about my claim
Sara (Debt Camel) says
I don’t know. It isn’t clear whether Provident will be progressing claims before the start of the Scheme.
Leslie says
Hi Sarah hope you can give me a bit information I contacted provendent on 24-01-21 to say I was making a complaint and asked for a copy all my loans I’ve had with them for the last twenty years for the interest to be returned I got a email 01-02-21 saying they would be in touch I then got a email saying they were still looking into my complaint on the 19-02-21 and would be in touch with a decision within28 days but still didn’t send any of my loan details I’ve had with them now I received a email today saying About new scheme that I have to wait until April what do you think I should do now
Sara (Debt Camel) says
There isnt anything you can do to speed this along.
Normally you could send this to the Finacial Ombudsman at 8 weeks but FOS won’t be accepting new complaints about provident.
Do you still owe them any money?
Leslie says
Hi Sarah thanks for answering no I don’t own them nothing paid off all loans 2016 but had provident loans for well over 20 years and was asking for a refund on my loans and copy of all my loans will they still send them to me Leslie xx
Sara (Debt Camel) says
I don’t know. but realistically it won’t do you much good if they do…
Andrew says
Thank you so much for your clear advice Sara.
I have had many Provident loans over the years and think I qualify for a refund on affordability grounds. I have an outstanding loan with a balance of £500. I have paid way more in repayments than I was lent. Is it legal for me to stop repayments while i await the outcome of the complaint i made last week using they letter format you layout?
Many thanks.
Sara (Debt Camel) says
If you think you have a strong case for a refund (many loans over the years sounds as though you may) then it makes sense to stop paying them now.
Say you should have a refund of £1000 (that’s a random round number, not a guess at what you might get) and say the payout is 5% (I think it may be less, see article above).
– If you pay off the £300 balance you will get back 1000*5%=50. So you are down £250 overall.
– If you stop paying now, then 300 of the £1000 will be used pay off the balance and you will get 700*5%=£35. So you are £35 up overall.
Provident dont add on extra interest if you stop paying. They will record missed paying your credit record but all negative marks will be removed when you win an affordability complaint.
Clifford says
Hi i have had loans for nearly 20 years with provident i have paid them all off and raised a complaint in november it is with FCA but early stages no adjudicator i have worked out im owed in interest paid £21000 does this scheme mean you wont get back the interest paid?
Sara (Debt Camel) says
I am afraid you are likely to only get a tiny percentage of the interest you have paid in the Scheme as the article above explains.
do you still owe them any money?
A M says
I wrote to provident 3rd January 2021 and waited to hear back but no reply. So I sent another letter last week explaining this and chasing my letter I had no idea of any claim scheme until I received a letter today from provident saying as my letter was received after their date I have to wait now and no acknowledgement or mention of my previous letter. I’m fuming I stated my loans back in 2006/2007 and even sent one of my first payment
Books with the initial letter. I had £500 [twice a year] for about 4 years then £1000 twice a year as I couldn’t afford to live without them. I had defaults ccj and was still been given loans until 2015 ish.
The 2nd letter I sent I made sure was recorded post to assure they got it.
Should I send another letter to look at my circumstances of initial letter not being auctioned? I’m feeling sick to my stomach on the thought of losing so much compensation and knowing my complaint was made in January and find myself getting angry for not chasing sooner
Sara (Debt Camel) says
Realistically if you had chased sooner it would not have made any difference.
Do you still owe them any money?
PS some of your comment was garbled – probably an autocorrect. I have put in [square brackets] what I think it should have read. Let me know if that is wrong.
Charlie says
Hi,
Is it now only possible to claim through the scheme?
I had several loans through provident over the years all of which were paid off.
Is it worth pursuing via another process in the hope of getting a better settlement or is it too late?
Many thanks,
Sara (Debt Camel) says
If you send Provident a complaint now, they won’t do anything with it – it will go either into the Scheme or as a claim in administration if a Scheme is not set up.
Angela says
I complained to Provident regarding a number of loans I had with them. Eventually they wrote to me and said my complaint was not upheld and the loans were affordable. I wrote to the ombudsman but didn’t persue my complaint when they got back to me 2 months later. Does this mean I will get nothing through the scheme?
Sara (Debt Camel) says
You will be able to put in a claim to the Scheme. But if it is upheld you are only going to get a tiny percentage of the proper refund back.
Angela says
Thank you Sara
D harwood says
Hi I got a letter also and not very clever with stuff like this but I got a couple provident loans around 10 year ago equalling to about £1000 maybe £1500 over the space of a couple years. Is it worth me persuing this?
Any help would be appreciated
Thank you
Sara (Debt Camel) says
It may be! There will be no harm in making a claim – you may not succeed and you may not get much back but it should be simple to do.
But you can’t put in a claim at the moment. That will only happen from about end July if the Scheme is approved.
So come back then?
celia tate says
Hi mines been with the financial onsbududs man and it went in my favour back in February provided aggressive with the Decision I’m literally still waiting to hear back from Provident I’ve been told that they were calculating I’m sorting it and when I rang last week they did say it was being dealt with open till last week whatever that means am I likely to get anything back now or should I just forget about it I’ve been told by Alligant agent mign was before there Announcement on the 16th of March what do you think will I get a check will I get anything or am I going to lose and end up with a pittance what should I do because I’m not hearing anything from anyone
Samantha says
My complaint has been with the ombudsman since August last year, they acknowledged they received it..i still have the cheque I never accepted….what do I do, just wait or accept that cheque…
Sara (Debt Camel) says
I suggest you cash the cheque
celia tate says
Hi mines been with the financial onsbududs man and it went in my favour back in February provided aggressive with the Decision I’m literally still waiting to hear back from Provident I’ve been told that they were calculating I’m sorting it and when I rang last week they did say it was being dealt with open till last week whatever that means am I likely to get anything back now or should I just forget about it I’ve been told by Alligant agent mine was before there Announcement on the 16th of March what do you think will I get a check will I get anything or am I going to lose and end up with a pittance what should I do because I’m not hearing anything from anyone
Sara (Debt Camel) says
It sounds as though you should be paid now, in full, but in this sort of situation I always say you cannot rely on that happening.
Fingers crossed for you!
Nicola says
I’ve just been told to cash my cheque if I still have it. Cheque over six mths old 5 grand. Company that was fighting for me just told me to cash it… I dont know what to do
Sara (Debt Camel) says
You can ask Provident if they will reissue it. They may say No :(
celia tate says
My partner also got that email today was it alligiant?
There wanting him to ring them and let them know what he intended to do
Debbi says
Anyone else going to vote against provident doing this? I had several loans and it looks like we will get hardly anything back. If they don’t get the votes to go ahead with this hopefully it means they fold & good riddance to them.
Angela says
Yeah l say vote no don’t let them walk all over us they thought we were idiots paying all that interest back to them on our loans but they didn’t know the position that people were in so let’s have the last laugh on provident and send them bust good riddance
Debbi says
Exactly Angela. They are literally needed us to bale them out. They can go take a jump.
Angela says
Debbi your spot on they do need us now to to help rip everyone waiting for claims that they don’t want to refund if we vote yes we don’t win anyway it’s NB only peanuts that they will refund us provident has ripped me of once they don’t get a second chance l am voting NO
Louise says
Has anybody approached provident for them to reply and say they have no record because it’s older than 6 years?
I have supplied the information from Lowell which lists the original ref. No. But provident are saying all records are destroyed as per data protection.
Darren says
Just a question, if the Scheme doesn’t get the go ahead, I m right in thinking that would mean provident would be finished, so we would end up with no payment at all..
Sara (Debt Camel) says
Well probably, but I suppose Provident could improve the Scheme? They aren’t short of money so they could if they wanted to.
Angela says
I hope provident don’t get the go head with the scheme and that. means they go into liquidation why should provident have it all there way if they win the vote we get next to nothing and they get to carry on trading and continue to rip people off some might say a bit of money is better than nothing but for me and l had a lot of loan’s l would sooner l got nothing than to see customers carry on being robbed.
Cat says
Help please! I logged a complaint with provident. It was nothing to do with affordability. My issue was they’ve incorrectly marked my credit file with missed payments (that I made). They did not resolve my complaint so I referred to Financial Ombudsman. Waited ages and finally picked up. Ombudsman said they’d contact company to rectify credit file. Provident updated them saying they don’t think they should update. I responded outlining reasons why they should. Ombudsman has been in touch today and says they are pausing complaint due to complaints scheme. I’m not looking for any money, I just want my credit file updated so its accurate. Do you think this is right to pause my complaint for months ? I really want my credit file to be accurate ASAP. Any ideas where to go next with Ombudsman? Or do you think i should raise a complaint with ICO for incorrect data / not rectifying data issue ? Thank you
Sara (Debt Camel) says
I suggest you email joe.sweeney@provident.co.uk and Neil.Iveson@provident.co.uk and explain your problem. It’s worth a try. If that fails, send the ICO a complaint.
When it gets to voting on this Scheme, you may want to consider voting No. If Provident go into administration, you may be able to get the credit record sorted then or (worst case) after about 18 months when Provident administrators have stopped talking to the CRAs, you should be able to get the CRAs to “suppress” the disputed record so no-one else can see it. That is too far away to be a good option, but at least it is some sort of fallback.
Cat says
Thank you for the guidance. Will give that a go. Really appreciate your help (and setting up this website). So useful :-)
frank mcdonnell says
My wife had several loans with provident that rolled over. She was still paying them £40 a week when we got the provident letter about the vote. She owes them about 300-400, following advice here I told her not to pay them any more. The agent has been ringing a couple of times a day. Does she just ignore him? Will they threaten court action?
Sara (Debt Camel) says
Has she told him she won’t be paying until her claim is settled in the Scheme?
Provident don’t tend to threaten taking people to court – and anyway there isn’t time before the Scheme would start!
frank mcdonnell says
No,havnt said to him yet, my wife sometimes bumps into him in the town. If we did wife was going to say that her benefits were cut and couldn’t afford to pay. Am not worried if we ignore him as long as there is no court action or debt collector letters. Could ignore the latter.
Charles says
Hi, thanks so much for the info has been a great help.
Unfortunately I have only just realised that I am in a position to claim after getting communication from provident themselves about the upcoming Scheme.
Somewhat frustrated I didn’t realise sooner as I had 5 small loans from provident in the past.
2 in 2006 totalling £850 and 3 between 2012 and 2013 totalling £1,250. All of which were done without any real checks of my income at the time and were a struggle to pay and meant I ended up extending them for more money.
I take it if this scheme goes ahead I am not likely to get anything prior nor expect much in return via a scheme claim?
Many thanks,
Charles.
Sara (Debt Camel) says
No claims are possible for loans before April 2007.
You will be able to make a claim for the three later loans in the Scheme, I can’t tell if Provident is likely to uphold a claim about “only” 3 loans – I’m not saying they were affordable, just that we don’t know how high provident will be setting the bar.
Fran says
How do I go about putting in a claim? I have made a copy of the letter template and changed it to include my information, what do I do now, who do I send the letter template to? I’ve had loans with provident, shopacheck, naylors and greenwood’s over the last 15 years and still have an ongoing loan with provident now which I cannot afford to pay.
Sara (Debt Camel) says
You can’t send in a claim now – any complaint sent at the moment will be ignored. You have to wait until the Scheme starts – or they go into administration.
As you have borrowed for such a long while it is likely you could be assessed as having a large refund – although you will only get a tiny amount of this back in the Scheme.
Say you owe £500. And your refund is calculated at £2000. And Provident will eventually payout 5% (Provident say it may be 10%, I think it could be less than 2%) (Obviously I have just made these numbers up.)
If you stop paying now, then £500 of your refund will be used to clear the loan and you will get 5% of the remaining £1500 as a refund = £75 cash.
If instead you pay off another £200, so your remaining loan is £300, then there will be a refund of £2200 minus the £300 = £1900. You get 5% of that = £95 in cash, but you have had to pay £200 in cash so you are down £105.
So it probably a good idea to stop making any payments now to the current loan, especially as you say they are unaffordable!
Tell your collector or (if you feel uncomfortable doing that) send them a message through the online contact form saying you won’t pay any more until they have assessed the claim you will be making to the Scheme.
Stopping paying will harm your credit record BUT if you win an affordability complaint all negative marks are removed.
terry nicholls says
Was provident part of welcome finance,
Sara (Debt Camel) says
not so far as I know
Sara (Debt Camel) says
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