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Re-financed Provident Loans ruled illegal by Financial Ombudsman

on Wednesday, 17 June 2015. Posted in EKF News

Are you entitled to a debt write-off?

News this week will come as a relief to many low-income borrowers who have incorrectly been given re-financed loans by Provident Personal Credit in Ireland. The high interest short-term loans company are facing writing off up to 100,000 loans following a recent decision from the Financial Ombudsman, because the loans were not correctly handled.

Issues have arisen where agents for Provident granted additonal loans to indebted consumers, who had not cleared debts due on their original loans. This has been deemed illegal by the Ombudsman. As an example, a customer may have borrowed €500 from their local agent, and may well have been making regular repayments of the debts, only to find themselves short of cash again, still owing €200 for example. At this point an additional loan of say €500 would have been granted, however instead of giving the full €500 loan across, only €300 was given, and the other €200 retained to clear the original loan.

We have a number of clients who have been struggling to repay these high interest loans, and we will now be investigating which clients are entitled to write downs on these refinanced loans. Many are deep in arrears, as these high interest loans are a key ingredient of a downward debt spiral. The loans are often easily granted with no credit checks, and only serve a short-term purpose, for example clearing off arrears on an electricity bill, before both the loan, and subsequent bills become unaffordable again.

If you are in debt, and you need advice, please contact us today.

 

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Even Keel Financial Ltd. is authorised and regulated by the Financial Services Authority. (CCL 0643158)
Dorothy Brown is a Licensed Insolvency Practitioner authorised by the Institute of Chartered Accountants of England and Wales