Home news Car loans firm Moneybarns faces FCA probe

Car loans firm Moneybarns faces FCA probe

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Shares in embattled doorstep lender Provident Financial have plunged 12% on news its car loan brand Moneybarn is facing a regulatory investigation.

The Financial Conduct Authority (FCA) said it was to examine affordability assessments for car finance and the treatment of consumers in financial difficulties.

It marked a fresh setback for Provident, which endured one of the largest share price falls ever seen in the London market in August when it announced a massive profit warning and its chief executive departed.
Peter Crook paid the price for financial difficulties in its consumer credit business linked to reforms under his watch, including the launch of a new computer system for doorstep collections which frequently sent staff to the wrong places at the wrong time.
That led to repayments being missed by customers.
Just last month, Provident also had to announce the death of its executive chairman who had been leading its turnaround.

Image: Manjit Wolstenholme died last month
The City watchdog’s Moneybarn inquiry takes place amid broader regulatory concern about the scale of credit card debt and a spike in car loans amid the squeeze on household budgets caused by inflation outpacing wage growth.
The FCA only granted Moneybarn authorisation to conduct consumer credit activities in 2016.
It has since encouraged the brand to make a number of improvements, including to the way it deals with future loan terminations.

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Its parent firm responded to the inquiry by saying: “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.”

Source: SKY