Venture lender Provident Financial Group has been given the green light from the High Court in London to pay partial compensation to mis-sold customers by its home loan business as it shuts it down.
Provident said on Wednesday it had received a court ruling sanctioning its plan of arrangement, despite concerns expressed by the British regulator, the Financial Conduct Authority (FCA), that it would bypass clients.
The subprime lending industry, which lends to people who cannot get loans from traditional banks, has faced regulatory scrutiny in recent years and an increase in complaints from customers alleging that they have been sold. unaffordable loans.
Provident, which also offers credit cards and auto financing, is providing a pot of £ 50million (€ 58.75million) to home lender customers to cover partial repayments to anyone with a valid claim for false sale.
The FCA said it had made it clear that it did not support the program, adding that the company was still under investigation for its conduct. However, he had previously decided not to oppose the scheme in court as the only likely alternative was the insolvency of the direct sales company.
Malcolm Le May, Managing Director of Provident, said, “We believed from the start that the program was fair and provided the best results for clients.”
Provident was, until recently, the largest operating money lender in the state. He announced in May that he was withdrawing from the Irish market and, in June, stopped collecting payments from Irish borrowers and announced that he would cancel outstanding loans here.
Provident had £ 18.3million (€ 21.3million) in loans outstanding in the Republic at the end of 2020, although that figure has declined since then. It had been in deficit in the Irish market for the past three years, according to reports. – Reuters