FCA fines Moneybarn £2.77m over unfair lending practices

The FCA deemed the Provident Financial subsidiary did not treat customers fairly when they fell behind with loan repayments while in financial difficulties, between 1 April 2014 and 4 October 2017.

Around 1,400 customers were defaulted after entering unsustainable short-term repayment plans.

Moneybarn also did not communicate the likely financial consequences of failing to keep up with payments to customers in a way which was clear, fair and not misleading.

Moneybarn worked collaboratively with the FCA during the investigation, accepted its findings and volunteered to provide redress of over £30m to all 5,933 potentially affected. Otherwise, the FCA would have imposed a financial penalty of at least £3,963,500.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: “The FCA gave Moneybarn significant credit for this in assessing the size of the penalty imposed.”

Shares in Provident Financial were 2.1% lower in London on Monday at 459.17 pence each. The company managed to fend off a hostile takeover bid from Non-Standard Finance in 2019 and saw the year's profits in line with what was expected last week when it published results.

The company also said it had agreed a bilateral securitisation facility with NatWest Markets to fund Moneybarn business flows. The new facility provides up to £100m of initial funding and is expected to grow to £275m over the next 18 months.