Provident Financial

History

The company was established in Bradford in 1880 by Joshua Kelley Waddilove to provide affordable credit to families in West Yorkshire. The company's credit methods were rapidly popularised amongst the working classes, but from its outset The Provident was subjected to criticisms by those who were opposed to consumer credit or the costs associated with doorstep credit. The Company was first listed on the London Stock Exchange in 1962. In 1997 it extended its operations to Poland and the Czech Republic, later operating in Slovakia, Hungary, Romania and Mexico.

In 2002 Provident Financial formed Vanquis Bank Limited, with a full banking licence from the FSA, a consumer credit licence with the Office of Fair Trading and a licence from VISA International to operate and issue credit cards under the Visa brand. Vanquis Bank Limited specialises in the pre-paid credit card sector, enabling people to use the benefits of a credit card where normally due to their credit profile they would seldom be successful in obtaining a card from mainstream card issuers.

In June 2004, the Office of Fair Trading referred a Super-Complaint from the National Consumer Council expressing their concern over a perceived lack of competitiveness in the home credit industry, particularly as the four largest operators accounted for around 70% of the business in the home-collected credit industry. The Office of Fair Trading published a consultative paper which echoed this concern about the concentration of market share and referred the case to the Competition Commission.

Although the Competition Commission's conclusion confirmed high levels of satisfaction among customers who found home credit products well suited to their needs, they believed that measures should be implemented to make the sector more open and transparent. They required that the website Lenders Compared be set up, the costs of which was to borne by Provident and the other large operators. In addition, all home credit operators were required to advertise the new site in documentation and advertisements and to offer customers regular statements. The Commission rejected the concept of price caps, recognising that home credit is valued by many customers and did not believe that it would help customers if home credit were less available as a result and the potential of people then turning to unlicensed lenders (loan sharks).

In 2005, the company closed its Yes Car Credit business, which had sold second-hand vehicles to customers with problematic credit histories via a national network of retail locations, offering the vehicle and finance as a single package. The company had been plagued by bad publicity, including a TV investigation into its selling practices, pressurisation of staff, unreliable vehicles and debt collection methods.

In 2007 it demerged its international business and a new separate public company was formed called International Personal Finance. This company now holds all of Provident Financial's ex-non-UK operations, with the exception of the Republic of Ireland. It also sold the motor insurance business leaving Provident Financial to concentrate on UK only financial products.

In 2011, Vanquis were criticised for offering Repayment Option Plans to their credit card customers, a form of insurance some consumer sites referred to as the 'new Payment protection insurance (PPI)'.

In 2012 the company were the subject of an episode of the BBC documentary series Panorama, which alleged that the company were breaching Office of Fair Trading guidelines by offering loans to vulnerable people who may not have understood the implications of the contracts they were entering into. The programme featured two instances of people with mental illness who were given substantial loans, including a woman diagnosed with schizophrenia who was lent several thousand pounds. The company were criticised by the Citizen's Advice Bureau, whose chief executive told Panorama, "I call into question...the motivation to keep exploiting people who clearly can't be held responsible for their own decisions in that situation."

In 2013, Provident launched its online short term loan Satsuma Loans.

In 2014, Moneybarn was acquired by Provident Financial plc, joining the home credit and online credit businesses and Vanquis Bank to become the third leg of the group.

The Central Bank of Ireland in late 2014 fined and reprimanded Provident for flagrant breaches of the regulatory requirements aimed at protecting Irish consumers. The five whistleblowers who reported the law breaking were then sacked by Provident which led to the matter being raised in Dáil Éireann.

Operations

In the UK, Provident Financial trades under a number of different brands, including Vanquis for its credit cards, Provident Personal Credit for its home credit operations, Satsuma for its online instalment loans, Glo for its guarantor loans and Moneybarn for its vehicle finance operations. The home lending operations are based in the head office building on Godwin Street in Bradford, Vanquis Bank is based in London with purpose-built premises located in Chatham, Kent and Moneybarn is based in Petersfield.

The company's home credit business lends to people in their homes via a network of local agents. Out of an estimated three million people who borrow from home credit providers, one million place their business with Provident home credit, giving the company an estimated 60% market share.