Today the Court sanctioned Provident’s scheme of arrangement (the scheme).
We have been clear that we do not support the scheme for a number of reasons, including the key concern that consumers are being offered significantly less than the full amount of redress they are owed.
We shared our initial views with the Court at the convening hearing on 22 April 2021. Provident subsequently made changes to its proposal, including deciding to wind down Provident Personal Credit Limited (PPC) meaning PPC will no longer continue in business.
Despite our concerns with the scheme, we were conscious that the only likely alternative to the scheme was the insolvency of PPC. In that scenario, consumers would likely receive no redress, which was an important factor in our decision not to formally oppose the scheme in court.
We continue to have significant concerns about Schemes of Arrangement being proposed and used by firms to avoid paying customers redress and plan to consult on our approach to this in the Autumn. The firm remains under investigation for its conduct.
Solo-regulated firms should be regularly assessing the adequacy of their financial resources (both capital and liquidity) and report to us immediately if they determine they are, or will soon be, in financial difficulty. To understand our expectations, firms should refer to the FCA Finalised Guidance on assessing adequate financial resources.