Doorstep lender Provident Financial said on Wednesday that its scheme of arrangement to compensate customers for mis-sold loans has been approved by the High Court.
Under the scheme, Provident had set aside £50m to partially compensate borrowers who had taken out high-interest loans that they could not afford with its Consumer Credit Division (CDD) between April 2007 and December 2020.
The company had warned that if the scheme was not approved, the CCD would become insolvent and claimants would be left with no compensation at all.
Chief executive officer Malcolm Le May said approval of the scheme was a “positive outcome” for customers with valid claims, “as it provides access to a redress payment which would not have been possible had the scheme not been approved”.
“The Court sanction enables us to move forward with the scheme and we expect that creditors will receive redress payments in the second half of 2022,” he said. “As we have stated previously, the managed run-off of the CCD business is progressing well and we will provide the market with a further update as to how the group is positioned for the remainder of 2021 and beyond with our interim results on 11 August 2021.”
Provident said the deadline for the submission of claims is expected to be towards the end of February 2022.