Lancashire Credit Union launches campaign to help customers of collapsed home lenders

The domestic subprime lender’s home loan operation was put under administration in March and ceased operations in May.

In an email to his customers and a post on Provident’s website, he directed people to affordable suppliers, especially credit unions.

Lancashire credit union CLEVR Money has welcomed the advice and has launched its own initiative to find and support former Provident clients in Blackpool, Preston, Fylde and Wyre.

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Anthony Brookes and Jackie Colebourne of Lancashire Credit Union, Clevr Money

Supported by Blackpool City Council, Preston City Council and the government agency Fair4All Finance, the CLEVR initiative aims to reach out to all those who are struggling financially due to the lender collapse.

CLEVR is writing to all local councilors, MPs, housing associations, the Citizens’ Advice Bureau and its own payroll partner member organizations – including hospitals, schools and private businesses – asking them to refer past clients to Provident to the credit union.

The team also created a new loan product specifically to help those who are struggling to cover their bills and other repayments following the loss of the Provident option, called CLEVR Doorstep Replacement Loan.

Anthony Brookes, loan officer for CLEVR Money, said the credit union is working to make sure people know about the ethical alternative being offered: “Thousands of local people and their families have used Provident home lenders. for small loans over many generations. Despite the extremely high interest rates, clients appreciated the door-to-door approach that made taking out and repaying loans relatively straightforward.

“While many of us in the responsible lending industry are happy when a high interest lender goes out of business, we know that leaves thousands of people in limbo when it comes to getting a credit in the future.

“To their credit, Provident has written to customers to report them to credit unions, which we welcome. The fear is that those left without the Provident Option will turn to other home lenders, online payday loan companies, or even loan sharks, incurring exorbitant interest rates and hidden fees, or worse.

Councilor Matthew Brown, Chief of Preston City Council, said: “The past year has been very difficult for many families who have lost their jobs or seen their hours cut dramatically due to straining COVID finances and household. budgetary.

“It’s important that people in need of finance have access to fair and affordable loans to avoid falling into the trap of payday and online lenders who charge high interest rates and often contain hidden costs that can make things worse. the problems of families in difficulty.

“Unfortunately, many vulnerable people are often exploited by unscrupulous lenders and end up accepting loans they are unable to pay. It is therefore important that everyone is aware of the options available as well as the advice and support available.

“Credit unions can be a great way for people to access affordable loans and help build community wealth as not-for-profit financial cooperatives. I encourage anyone who is unsure about accessing a loan and its options to contact the Citizens Advice Bureau to discuss their options and get advice.

Sacha Romanovich OBE, CEO of Fair4All Finance, added: “The high cost credit market continues to contract, but the demand for credit will not go away with it. People who cannot access regular credit still need loans, whether it is for a stove, a washing machine, or new school uniforms.

“Going without essentials like these is a difficult option to face and there is a real risk that this growing gap in the market will be exploited by loan sharks. We urgently need to develop fairer alternatives.

“Credit unions and CDFIs have fantastic expertise in serving clients in a sustainable and ethical manner. They support every step of the borrowing journey and reinvest any profits in the communities they serve. However, they don’t have the deep advertising pockets of traditional vendors, so more needs to be done to increase their brand awareness with customers.

“Affordable credit provided in a fair and responsible manner can be a lifeline for people excluded from traditional providers, helping them overcome income shocks and purchase essential items. And community finance providers are showing that you can serve this market in a sustainable way if you have the right business practices in place for affordability checking, collection, and repeat lending. “

CLEVR Money provides fair and affordable loans at levels capped by the government. It is regulated by the FCA and its savers protected by the FSCS, just like the banks. As an ethical, community-driven organization, it exists to provide a responsible alternative to high interest loans with no fees or hidden agendas.

Anthony added, “We prioritize people over profit, working directly with them to help pay off debts and put them on the path to better financial health. In the aftermath of Provident’s collapse, we’ve created a new door-to-door replacement loan to help you out. I will speak directly to each caller to understand their situation and recommend the best course of action for that person.

Provident Financial is also in talks with the Financial Conduct Authority over its compensation scheme for people who have been mis-sold.

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