My dear old mother has managed to run up just under a 1000 of debt with Provident with several small cash loans all running concurrently. When I saw the "loan" agreement she signed it shows the interest/APR at 365%!!! I was furious (1) because she'd taken out the loans anyway, and (2), because Provident are the scum of the earth targeting their loans at the people who can least afford them and my mum being somewhat a little confused with life in general believed she was getting a good deal.
Today, I saw this article:
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Should I tell my mother to stop paying these people and wait to see what happens?
The APR is high because the loans are short term, and because they are high risk loans, many of which will not get paid back. If the company is going to make any money, the loans that do get repaid have to have a high enough return to cover those that don't.
Provident target their loans at people who cannot get credit anywhere else. If provident and similar companies didn't exist, then many people who need credit, would not be able to get it, they are providing a service, which people can choose to use, and choose to pay the price they agreed, or can choose not to use and have no credit at all. Don't blame provident for your mothers shortcomings.
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You could, but if the court rules in Providents favour, your mother will find herself in more debt than she was before, due to all the extra interest on the payments.
No. Why would you want to put additional stress on your Mother whom you describe as already "being somewhat a little confused with life in general". Give her the money to pay the loan off & if needs be, be there when the collector calls, tell them not to call again & make sure your Mother never needs their sarvices in future.
If you were a fraudster could you not just take out a loan with the above company, and never pay it back (since I assume they do limited checks since they are high risk operators)?
She would have contacted them to get the money. She would have told them how much she wanted to borrow. They didn't force her to take the money. They do lend to those the banks won't or can't lend to.
So are you furious with her for taking out the loans? She is an adult able to make her own decisions isn't she? Or is she incapable of making decisions and someone else will be appointed to handle her affairs?
I don't like Provident. But they do provide a service that people want.
Incorrect assumption. They do the same if not better checks. It's all about insurance. The number of non performing loans vs. the number performing. They consider that they can make greater profits out of the high risk end of the market. To do so they need to, and do understand their market better than most people/companies.
The Consumer Credit Act 1974 says (sections 63 on ..) that any client MUST be sent "a notice in the prescriber form indicating the right of the debtor or hirer to cancel..." -
I know from other situations Provident have no system for getting these notices out on time.
AFAIK in the absence of such a notice delivered on time, within 7 days, the Provident Agreement is Void and unenforceable.
Suggest you use this line withProvident & tell them you'll pursue with Citizens Advice & Watchdog etc . etc....
(Quoting from the Citizen's Advice excellent web site,..... @
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" Cancelling a credit agreement
Cancelling before payments are made
Regulated credit agreements (see under heading Regulated credit agreements) may allow you to cancel the agreement if you want to change your mind. You have a 'cooling off period' in which you can change your mind. You can cancel the agreement if:-
a.. you signed it anywhere other than on the premises of the trader or creditor; and b.. you discussed the credit face-to-face with the trader or creditor before you signed the agreement. If you are entitled to cancel the agreement, you must be sent a cancellation notice within seven days of signing the agreement explaining that you have the right to cancel the agreement. A cancellation form will be enclosed with the notice and you can use this (or write a letter) to cancel the agreement. If you do want to cancel, the cancellation must be sent to the lender within five days of receiving the notice, preferably by recorded delivery. If the goods are bought from a mail order catalogue agent, the agreement may say that it can be cancelled within 14 days of the agreement being signed and no cancellation notice will be sent. If you cancel an agreement during the cooling off period, you must:-
a.. take reasonable care of the goods. This duty lasts for 21 days after cancellation b.. hand the goods back to the supplier if they ask you in writing, either in advance or when they come to collect them. If you do not hand the goods over when requested in writing, and the request was made within 21 days of cancellation, you must take care of the goods until you hand deliver them or post them back at your own expense c.. return any money advanced under the agreement d.. pay for goods installed, for example, a conservatory, or a fitted kitchen or if they were supplied before the cancellation form was sent to meet an emergency. The supplier:-
a.. if they want to collect the goods, must request this within 21 days of cancellation b.. must return any goods given in part exchange (or give a cash equivalent) within ten days of serving the notice of cancellation c.. must return any payments you have made, for example, deposits and instalments d.. cannot ask for payment for perishable goods or goods 'consumed by use', for example, fuel or spare parts. If you have made a pre-payment for goods or services which you are buying on credit (as a deposit or part-payment), you should get all of your money back when you cancel unless you arranged your own credit.
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so you have MORE rights if you sign any credit agreement NOT at a traders premises. (So, for example, if you sign a credit agreement to buy a car at a car dealers you may be stuffed, but if at a special event run by the dealer at an hotel you have more rights....)
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