Senior MP calls for FCA investigation into Provident Financial
A senior Yorkshire MP has written to the Financial Conduct Authority (FCA) to demand action about the “shocking marketing tactics” of Bradford-based sub-prime lender Provident Financial.
Leeds West MP Rachel Reeves has complained to FCA chief executive Andrew Bailey about a Christmas marketing letter offering short-term loans with representative APR of 535.3%.
Rachel Reeves MP
She said: “I believe this was a cynical tactic to exploit vulnerable people who struggle financially at the best of times, let alone over the festive season. Provident tried to tug on people’s heartstrings with a deliberately emotionally-loaded message to urge them to take out a loan at a rip-off rate of interest.”
Reeves, who is also chair of the Commons business select committee, highlighted the rebuke issued by the Advertising Standards Agency (ASA) to Provident Financial about the mailshot, which the industry watchdog described as “irresponsible”.
She has called on Bailey “to investigate to see what action that the Financial Conduct Authority could take against Provident to discourage this firm and others from repeating these kind of shocking marketing tactics.”
The ASA last week publicly ordered Provident Financial to make sure future advertising did not put “emotional pressure” on consumers to take out a short-term loan. It had concluded the advert had targeted “vulnerable” consumers.
A spokesperson for Provident Financial said: “The ASA informed us of a complaint made about the advertisement and we subsequently removed it from circulation, prior to the ASA’s final ruling. Provident also provided assurances to the ASA that such content will not be used in any further marketing materials.”
Provident had defended the mailshot which it said was worded cautiously to convey the message that the option of a loan was one way of helping to manage finances over what can be an expensive period, rather than being the only way.
It also said it had processes in place, including a face-to-face meeting in a customer’s home, where their needs were discussed and where checks on affordability, suitability and sustainability were made, before approving credit.
