Provident Financial to close doorstep loan unit
Provident Financial is planning to shut its venerable 141-year-old doorstep lending arm after increasing pressure from the regulator.
The firm is also set to close its online lending business, Satsuma.
Last month, the firm warned that it might have to put its home credit business into administration or liquidation after a rise in mis-selling complaints to the Financial Ombudsman Service.
The regulator received 3,500 complaints from customers in the first half of last year, which soared to 10,390 in the second half. More than seven in ten of the complaints were upheld, The Times reports.
One reason for the rise was claims management companies retraining their sights on high-cost loan providers after the deadline for PPI complaints passed in August 2019. Provident will tell shareholders about the closure when it publishes its annual results on May 10.
Provident Financial previously announced an operational review of its Consumer Credit Division which included, as an option, the possibility of a managed run-off of its home credit and Satsuma business.
However, yesterday, the group said that no decisions have been made, but confirmed that the review is nearing completion and the outcome will be announced with the Group’s full year 2020 results, which are to be published on Monday 10 May.