Warning as millions of payday loan customers only have weeks to request repayments
Four million people could be eligible for a refund – but you have until the end of February to claim it.
Following a court ruling in August 2021, borrowers who were sold home loans by Provident Financial can get some of their money back.
Under a new compensation agreement, customers who were wrongfully sold unaffordable loans through Provident or the three brands it owned – Satsuma, Greenwood and Gio – can now request a refund.
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The âscheme of arrangementâ system allows customers with unpaid debts to be reimbursed.
But last year the Mirror reported that many Provident customers would find the news disappointing, as the lender believes it can only repay on average 5-10% of disputed loans.
But it’s better than nothing – and nothing was a very real possibility.
Provident asked the High Court in London to approve the scheme because it feared it could not reimburse all customers who complained without running out of money.
The financial ombudsman watchdog was on the side of customers in three-quarters of the complaints against Provident.
So it’s unlikely you’ll get all your money back, but you could still get hundreds of pounds in compensation.
You could even recover more than 10% of your loan if fewer applicants than provided by Provident.
Around 4.3 million loans are covered by the kitty, of which Provident has set aside Â£50 million, and were all issued between April 7, 2007 and December 17, 2020.
The loans, which were issued by the four different brands, were sold between April 6, 2007 and December 17, 2020.
To qualify for a refund, you must have taken out a loan within the period that was unaffordable.
This means that you would be unable to repay the loan along with your bills and living expenses.
But you only have a few more weeks to file a claim.
You can complain online here.
If you have a valid claim, Provident will tell you how much you will be reimbursed.
He will also show how he worked the figure he offers you.
Provident chief executive Malcolm Le May said, “We expect creditors to receive remediation payments in the second half of 2022.”
But the deal was criticized by regulator the Financial Conduct Authority, who said: “We have made it clear that we do not support the scheme for a number of reasons, including the main concern that consumers see themselves offer far less than the full amount of the repair they are due.”
The program will close before the end of February 2022.
In May 2021, Provident announced that it would retire from home loans after more than 140 years.
The lender, which reported a loss of Â£113m for the year, cited “changing customer preferences” for its decision to stop offering loans on people’s doorsteps.
Provident has been lending and collecting door-to-door repayments since the 1880s.
Many of his loans are for short-term repayments and are often for small amounts â usually a few hundred pounds.
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