The FCA has published a second letter of concerns[1] explaining to Provident why it does not support its proposed scheme of arrangement (the scheme). We expect that Provident will bring our letter to the court’s attention at the sanction hearing, which is scheduled for 30 July 2021, when the Court will be asked to sanction the scheme.
The FCA’s key concern is that consumers are being offered significantly less than the full amount of redress they are owed.
Despite our concerns, the FCA does not plan to formally oppose the scheme in court. This is because in this case, the only likely alternative to a scheme is the insolvency of Provident Personal Credit Limited (PPC).
We understand that in an insolvency scenario, without a scheme, consumers are likely to receive no redress. We have also taken into account that Provident’s plan is for PPC to cease business and wind down.