Customers who were mis-sold loans will only get back 10% of their money – your rights explained

CUSTOMERS who were mis-sold loans by a high cost lender will get less than 10% of their money back.

Provident, which had four million borrowers, closed its doorstep lending business in December last year.

Consumers will get between 4p to 6p for every £1 due, although the final figure will be confirmed after any customer appeals.

That means the compensation payment will be less than 10% of what the customer is owed.

The payments will be made in July.

Thousands of consumers had their repayments written off and others were able to apply for compensation when Provident shuttered its lending business.

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It also included the firm's other brands; Greenwood, Satsuma and Glo.

Customers who were mis-sold loans at unaffordable rates had until February 28 to apply for a share of the £50million compensation pot.

What are my rights?

Provident will be in touch about your claim before June, and you will have a chance to appeal if you think its decision is wrong.

The final compensation figure will be confirmed after the appeal, but it will be between 4p and 6p.

Appeals will be assessed in June and the payment will be made in July, when the compensation scheme will close.

Claims had to be made by February 28, so if you missed that deadline it's too late to apply for compensation.

The reason you will get a small percentage of your money back is because Provident doesn't have enough cash to meet all the claims in full.

The firm had set aside £50million to meet redress payments.

The loans affected were given out by four different brands:

  • Doorstep loans made by Provident
  • Doorstep loans made by Greenwood
  • Payday loans through Satsuma
  • Guarantor loans through Glo

Regulators found that these products were unfairly sold to people and that the providers didn't carry out the right affordability checks.

If you feel you were unfairly sold a loan by a different company, it's worth checking whether you can get any money back.

Contact the lender in the first instance but you could also open a complaint with the Financial Ombudsman Service.

You don't have to wait until the firm goes bust – and making a claim before it collapses means you could get a bigger payout.

A string of high-cost loan firms have gone bust in recent years including the UK's biggest short-term lender, Wonga, in 2018.

Wonga victims were given just 4p for every £1 they were due to be paid.

Other high cost loan firms that collapsed after being overwhelmed by customer refund requests includes guarantor lender TFS Loans.

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It entered administration in February this year after it ran out of cash.

Meanwhile, Amigo Loans customers are still waiting for their refund process to be confirmed.

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