More than 4 million Provident, Greenwood and Satsuma customers must repay their payday and home loans

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CUSTOMERS of Provident Financial can claim compensation under a new partial refund scheme.

You may be able to get some of your money back if you were mistakenly sold on an unaffordable loan through Provident, Satsuma Payday Loans, Greenwood, or Glo.

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New program means Provident Loan customers who were mis-sold could get partial refundsCredit: Alamy

Affected customers will not get all their money back, but could receive hundreds of pounds.

The new scheme has been given the green light by the High Court and comes into force from tomorrow.

Provident called for the program to be in place, saying it could not afford to continue to reimburse all customers who complained.

The Financial Ombudsman upheld 75% of complaints against Provident, due to a lack of proper affordability checks.

The city’s watchdog, the FCA, said it did not support the decision for several reasons, including “the primary concern that consumers are being offered significantly less than the full amount of compensation owed to them. “.

Despite these fears, the FCA has not appeared in court to contest, saying that because lenders face immediate insolvency, customers could end up getting no redress if the program does not go through. before.

The watchdog added that the company was still under investigation for its conduct and said it had wider concerns about companies using schemes of arrangement to avoid paying customers which is due to them.

He added that the lenders did not plan to continue the lending business, which was another factor in his decision.

The new scheme, which officially kicks off from August 5, will distribute £50million among all customers who have a claim.

However, experts criticized the High Court’s decision, arguing that Provident Financial could afford to spend more money on reimbursing its customers.

Sara Williams, founder of debt advice website Debt Camel, said: “Provident didn’t do good checks to make sure its clients could afford loans. In some cases, it didn’t seemed to do no checks at all!

“It is unfair that Provident was allowed to close the division that provided home and payday loans and pay these customers so little.

“He still manages the highly profitable businesses of Vanquis and Moneybard which are unaffected by this program. The FCA needs to rethink its regulatory system that allows this to happen.”

The main criticism of the new regime is that consumers are unlikely to get all their due.

But Williams is keen to remind customers that they should always make a claim because you could get a good chunk of the money back.

She said: “People won’t get their full refund under the scheme because there’s only £50m to pay. But it’s worth making a claim because it’s easy to do and you can get hundreds of pounds refunded. And as a bonus, any problems will be removed from your credit report!”

Here’s how to apply to get your money back:

What loans are covered by the scheme?

About 4.3 million loans are covered by the new repayment scheme.

The loans, which were issued by four different brands, were sold between April 6, 2007 and December 17, 2020.

The brand names are:

  • Foresight – often called “home loans” or “mortgage”
  • Satsuma Payday Loans
  • Greenwood – a home loan brand that has not been used since 2014
  • Glo – a very small guarantor loan brand.

Vanquis and Moneybarn brands are not included in the partial refund plan.

If you believe you have been mis-sold by any of these brands, you can always a normal affordability complaint and get a full refund.

Who can make a complaint?

If you took out a loan from one of the four brands listed above between April 6, 2007 and December 17, 2020, you may be able to apply.

To get a refund, your loan must be deemed “unaffordable”.

A loan is only affordable if you can make the repayments while still being able to pay all your regular bills and living expenses.

On the other hand, if your loan repayments meant you had to go into more debt or not pay, it was probably unaffordable.

How to claim

If you want to request a refund, you only have six months to do so.

The first thing to do is to create an account on scheme portal. To do this, you will need your plan ID number and the exact version of your name under which you took out the loan.

Once the account is created, you can update your details, register your complaint and make any changes to it.

If you are having trouble setting up your account or cannot find your ID number, you can call Provident Loans on 0800 056 8936.

When making a claim, you will also need to provide proof of any County Court judgments or defaults.

Anything that happened in the last six years will show up on your credit report – follow our guide to checking yours.

If the defaults or CCJs are older than that, you will need to look for documents or emails regarding the payments you missed.

Even if you don’t have the proof, you can still make a request and the pension fund will still examine your request.

If you already have an unresolved complaint with Provident or the Financial Ombudsman, you don’t need to do anything.

Your complaint will automatically be transferred through.

How much will I recover?

If your request is accepted, the Provident Fund will contact you to advise you of the amount due to you.

First Provident will decide which of your loans was unaffordable and then calculate the total interest you paid on those loans.

Then the lender adds 8% interest to this total for each year since the interest was paid. For example, if your loan was in 2016, you would have 8% interest over six years.

This calculation tells you the total repair due to you, but you are unlikely to recover all of it.

It is more complicated to determine the amount you will receive, because the program will only give partial refunds.

Provident Loans estimates that people will get between 5% and 10% of their repair, but it will depend on how many people make a claim and how much is owed to them.

When will I receive my refund?

The math to figure out exactly what you’ll get from the plan can’t be done until everyone has made a claim.

Since the claim period extends until the end of February 2022, Provident can’t even begin to work out what people will be paid until then.

He says he expects everyone who owes a refund will be paid, and the program will be closed by the end of 2022.

It’s worth keeping an eye on your email and account in the meantime, so you can check if your application is rejected.

If so, but you think the decision is unfair, you can complain to the Financial Ombudsman. If the ombudsman agrees, Provident will have to pay.

Debt Camel has some handy tips and tricks for claiming, including information on what to do if your loan is still unpaid in a step by step guide.

Malcolm Le May, Managing Director of Provident Financial, said: “The Court has approved the sanctioning of the CCD Scheme, which is a positive outcome for CCD clients with valid claims under the Scheme, as it provides access to a remedial payment that would not have been possible if the plan had not been approved.

“We expect creditors to receive relief payments in the second half of 2022.”

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