Thousands of Provident customers who held off on cashing in cheques are being urged to claim their money now - even if the cheques are out of date.
The doorstep lender has been emailing customers to say it is honouring cheques it sent as an offer of compensation.
In many cases, these cheques were often for a lower amount than what people were owed - this meant customers didn't cash in their money because they wanted to take their complaint further.
But since then Provident has closed its doorstep lending business and customers are likely to get far less compensation under a redress scheme.
The lender, which reported a £113million loss for the year, cited "shifting customer preferences" for the decision to close in May 2021.
In an update today, Provident is now urging borrowers to cash in their cheques and says you can still claim the money even if you’ve made a claim against it.
It had not issued new cheques to customers.
In an email to one Provident customer, which was first posted on the Debt Camel blog, the lender said: “We’ve checked our records and found that you have an outstanding cheque from a complaint you have previously raised with us that can be cashed.
“The cheque represents money owed to you by Provident Personal Credit. You’re within your rights to claim this money. You can do this whether you’ve made a claim in our Scheme of Arrangement or not.”
Customers have been keeping hold of the cheques under the hope they may be entitled to more under a redress scheme - and in that time, many have expired.
Have you received money from Provident? Let us know: mirror.money.saving@mirror.co.uk
Sara Williams, who runs Debt Camel, explained that many cheques went uncashed as Provident frequently used to offer to refund just a few loans, often not the largest or the most recent.
For example, in one case, Provident upheld a complaint over a loan for £1,000 but decided the next loan for £2,500 was affordable.
Ms Williams said: “I expect this may affect several thousand people who have cheques ranging from a few hundred to a few thousand pounds.
“If you have one of these cheques, Provident should have sent you an email about it.”
If you have one of these old cheques but haven’t been sent an email about it, you can call Provident on 0800 121 8034.
A spokesperson for Provident said: “Cashing a cheque did not stop a customer going to the Financial Ombudsman Services, or applying for compensation through the Scheme of Arrangement.
"If you have lost your cheque, please contact us on 0800 121 8034. Cheques can be cashed within six months of being issued, and customers can apply to the Scheme of Arrangement until the end of February 2022.”
Provident previously provided short-term, guarantor and doorstep loans, charging interest as high as 1,557.7% APR in some cases.
Provident compensation scheme is closing
Tens of thousands of borrowers with loans Provident can still make claims for mis-sold loans - but you only have a few days left to do this.
Provident has put aside £50million to refund customers with outstanding claims, under a system called a “scheme of arrangement”.
But the redress scheme is due to close on February 28. You can claim online here.
Any refund due will likely not be as much as Provident customers expect, as the former lender thinks it can only repay an average of 5-10% of any disputed loans.
But it is better than nothing - and in some cases the money back could still be worth thousands of pounds.
Around 4.3million loans are covered by the cash pot, and were all issued between April 7 2007 and December 17 2020.
The loans, which were issued by Provident and its other sub-brands Satsuma, Glo and Greenwood, were sold between April 6, 2007 and December 17, 2020.
To be eligible for a refund you must have taken out a loan in the period that was unaffordable. This means you would be unable to repay the loan as well as your bills and living costs.
If you have a valid claim then Provident will tell you how much you will be repaid.
Provident asked the High Court in London to sign off the scheme because it feared being unable to refund all the customers making complaints without running out of money.
The Financial Ombudsman watchdog was siding with customers in three-quarters of complaints against Provident.
