City watchdog launches investigation into Moneybarn

The City watchdog has launched an investigation into Moneybarn, a car loans firm controlled by Provident Financial.

Tuesday, 5th December 2017, 8:35 am
Updated Tuesday, 12th December 2017, 6:48 am
The Financial Conduct Authority is the city watchdog

The Financial Conduct Authority (FCA) probe will focus on processes applied to customer affordability assessments for car finance and the treatment of consumers in financial difficulties.

“Provident Financial Group aims to act responsibly in all its relationships, and to play a positive role in the communities it serves.

“The company will work collaboratively with the FCA to investigate the remaining concerns and resolve any outstanding related issues as soon as practicable,” the group said in response to the news.

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The FCA granted Moneybarn authorisation to conduct consumer credit activities in 2016, since which the watchdog has encouraged the firm to make a number of improvements, including the way it deals with future loan terminations.

News of the investigation follows a brutal few months for Provident, which has issued a string of profit warnings, seen its shares tank and has had to announce the death of executive chairman Manjit Wolstenholme.

In October the firm revealed it would book heavy annual losses at its consumer credit business, but claimed that it is making progress with a turnaround plan.

As part of efforts to shore up the business, Provident launched a new home credit model in July with the aim of moving from self-employed door-to-door agents to full-time “customer experience managers”.

Shares in Provident, which has around 2.5 million customers, have taken a hammering on the London Stock Exchange this year.