The Provident compensation scheme – can you claim?

Have you had a loan from Provident, Satsuma, Greenwood or Glo? Did you know that you may now be able to get compensation, if they didn’t follow the rules when you took out the loan? Read on to find out if you can claim a refund, how to go about it – and how it could help improve your credit score…

What is the Provident compensation scheme?

Most people know Provident for their doorstep loans. But after a number of court cases, the Financial Ombudsman Service (FOS) and the Financial Conduct Authority (FCA) became concerned that Provident might not be doing enough to check that all their customers could afford to repay their loans. So now Provident don’t offer doorstep loans at all – and up to 4 million customers may be owed refunds.

Provident can’t afford to refund everyone in full, so they’ve come up with a scheme which caps the total amount available for refunds at £50 million. This scheme opened for claims on the 5th of August 2021.

Who can make compensation claims?

The qualifying loans relate to four different brands:

• Provident
• Satsuma payday loans
• Greenwood Personal Credit Limited
• Glo (a very small provider of guarantor loans)

Did you have a loan from one of these brands between 6 April 2007 and 17 December 2020 from? Did the repayments leave you so short of money you had to borrow more, or did you get behind with bills? Then it was ‘unaffordable’. If you’re one of our customers, these factors may well apply to you.

How can I make a claim?

We know some of our customers had an email asking them to vote on the Scheme. If you did that, then you have already submitted a claim, so you don’t need to do anything.

If you did not vote, you can now make a claim. The deadline is the 5th of February 2022, so it’s best to claim sooner rather than later!

You can make a claim through Provident’s online portal – but if you struggle to do that for any reason, phone them on 0800 056 8936.

What happens then?

Once you’ve made a claim, it may take several months before you hear anything. But check the portal every month or so to make sure you don’t miss an email. 

Provident will decide which loans were unaffordable using

• the details of your loans
• other information they have in their records
• any evidence you have sent in.

If they decide that some or all of your loans were affordable, you can appeal through the scheme.

How much money will I get?

Once they have dealt with all appeals and so on, Provident will split £50 million between everyone entitled to a refund. So you will only receive a percentage of what you’re owed, not a full refund: Provident estimate this will be between 5-10%.

But another important outcome for customers is that this might be good for your credit record. Any defaults or missed payments relating to loans that are upheld as unaffordable will be wiped from your credit record.

Information for insolvency customers

What happens to compensation payments if you’re on an insolvency solution like an IVA or Trust Deed? It depends on the terms of your solution.

For most of our customers, it’s a condition of your solution that you’re expected to make a claim and to pay the proceeds into your solution. (It’s a similar situation to PPI mis-selling.) Depending on where you are in your IVA, this might help you get to the end of your solution sooner, although this won’t be the case for everyone. Get in touch with us if you have any questions.