Yahoo Finance Provident Financial to repay £170m to customers in new mis-selling scandal
Doorstep lender Provident Financial has been fined £2m and will pay more than £170m in compensation after another mis-selling breach.
Thousands of customers were sold an add-on product on its Vanquis credit card which actually put people further into debt rather than help them manage their repayments better.
The fine relates to Vanquis’ “Repayment Option Plan”, which has been offered to all customers since June 2003. It allowed customers to freeze their account, take a payment holiday and avoid late fees for one month a year.
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But the watchdog the Financial Conduct Authority said few customers were aware the ROP could see their debt worries actually mount up.
The FCA has now fined Provident £1,976,000 for failing to disclose the full price of an add-on product.
It will also have to repay an estimated £168,781,000 in compensation to the victims of the account management product. Provident has about 1.7 million customers.
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Mark Steward, director of enforcement and market oversight at the FCA, said: “Most Vanquis customers chose the ROP to help manage their credit without realising instead that the product might lead to their indebtedness increasing.
“Customers are entitled to be told all relevant information when being offered financial products. These were very serious breaches.
“Vanquis has decided now to do the right thing by acknowledging the wrong-doing and offering to compensate its customers.”
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The FCA added that customers who took out the product should be contacted by Vanquis directly to explain how they will be refunded.
If they have not heard anything or believe they have not received a suitable settlement, they should contact the watchdog.
A second FCA investigation into Provident’s car and van financing arm, Moneybarn, has not yet been resolved.
