Moneybarn fined £2.77m for unfair treatment of customers in debt
The Financial Conduct Authority (FCA) found that between April 2014 and October 2017, customers weren’t treated fairly after falling into arrears. Moneybarn, part of Provident Financial, also failed to communicate in a clear and fair way the likely financial consequences of not keeping up with payments.
More than 1,400 customers, many of whom were vulnerable, subsequently defaulted after entering “unsustainable short-term repayment plans”, the FCA said.
Moneybarn said that by October 2017, it had amended its processes to address concerns raised by the FCA’s historic investigation. It has voluntarily provided redress of more than £30m to around 6,000 customers affected by these earlier failings.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Moneybarn did not give its customers, many of whom were vulnerable, the chance to clear their arrears over a realistic and sustainable period.
“It also did not communicate clearly to customers, in financial difficulty, their options for exiting their loans and the associated financial implications, resulting in many incurring higher termination costs. These were serious breaches.”
Shamus Hodgson, managing director of Moneybarn, said: “Throughout the investigation we worked collaboratively with the FCA. We are happy that all customers potentially affected by these findings have been fully compensated for any detriment they might have suffered.
“The processes we have had in place since 2017 are clear, effective, and appropriate. The FCA has clarified its expectations of lenders in these important aspects of customer treatment, which will provide guidance for all finance companies within the motor industry. As market leaders in this area, we’re proud to set an example for others in the industry to follow.”