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You can find the current article at its original source at https://www.theguardian.com/business/2017/aug/23/provident-financial-faces-exodus-of-staff-and-clients-after-profit-warning
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| Provident Financial in race to fix technical problems and retain staff | |
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| The troubled doorstep lender Provident Financial is racing to fix its technical problems as rival firms attempt to cherry-pick its most valuable staff and borrowers. | The troubled doorstep lender Provident Financial is racing to fix its technical problems as rival firms attempt to cherry-pick its most valuable staff and borrowers. |
| Shares in Provident had plunged 66% on Tuesday, wiping £1.7bn off its stock market value, after it issued a shock profit warning and its longstanding chief executive, Peter Crook, resigned. | Shares in Provident had plunged 66% on Tuesday, wiping £1.7bn off its stock market value, after it issued a shock profit warning and its longstanding chief executive, Peter Crook, resigned. |
| The company, which makes short-term loans at high interest rates to people in financial difficulty, blamed its woes on new software it uses to arrange home visits by its “customer experience managers” (CEMs), who travel the country selling loans and collecting debts. | The company, which makes short-term loans at high interest rates to people in financial difficulty, blamed its woes on new software it uses to arrange home visits by its “customer experience managers” (CEMs), who travel the country selling loans and collecting debts. |
| Comments on an internet forum used by dozens of Provident salespeople, Providentagents.com, suggest that the company is risking an exodus of staff to rival companies, raising the prospect that customers could follow them. | Comments on an internet forum used by dozens of Provident salespeople, Providentagents.com, suggest that the company is risking an exodus of staff to rival companies, raising the prospect that customers could follow them. |
| One forum user, Daisy Boo, said she was aware of several CEMs who were planning to quit after just 10 weeks with the firm, claiming that there would be “loads more leaving”. | One forum user, Daisy Boo, said she was aware of several CEMs who were planning to quit after just 10 weeks with the firm, claiming that there would be “loads more leaving”. |
| Provident created the full-time CEM role earlier this year, doing away with its 130-year old army of self-employed agents who managed their own list of clients. | Provident created the full-time CEM role earlier this year, doing away with its 130-year old army of self-employed agents who managed their own list of clients. |
| But the use of new software to manage their schedules has fallen into disarray, with debt collectors complaining of continuing problems despite recent signs of improvement. One forum user, Bunny, said: “Some days I don’t have an active list at all. Other times I have a list full of card payers or monthly payers that don’t need calling on. I feel I am falling behind when all I want to do is work. So frustrating.” | But the use of new software to manage their schedules has fallen into disarray, with debt collectors complaining of continuing problems despite recent signs of improvement. One forum user, Bunny, said: “Some days I don’t have an active list at all. Other times I have a list full of card payers or monthly payers that don’t need calling on. I feel I am falling behind when all I want to do is work. So frustrating.” |
| Stuart Duncan, an analyst at Peel Hunt, said Provident was now under pressure to fix its technical issues in time to prevent current and former staff joining rivals and taking valuable customers with them. | Stuart Duncan, an analyst at Peel Hunt, said Provident was now under pressure to fix its technical issues in time to prevent current and former staff joining rivals and taking valuable customers with them. |
| “The likes of [its competitors] Morses Club and Non-Standard Finance are picking up experienced agents and it’s probably fair to say that a lot are coming from Provident,” he said. | “The likes of [its competitors] Morses Club and Non-Standard Finance are picking up experienced agents and it’s probably fair to say that a lot are coming from Provident,” he said. |
| “Once they [sales agents] have relationships with customers, they become valuable. Every competitor will be looking at every agent, thinking ‘How many of them can we get?’” | “Once they [sales agents] have relationships with customers, they become valuable. Every competitor will be looking at every agent, thinking ‘How many of them can we get?’” |
| Another forum user, MavisBloggs, said: “I left in March, it was bad enough being ‘self employed’, I was never even applying for a full-time position. Lots of my old customers came to me and they still are, they are showing no signs of ‘drying up’.” | Another forum user, MavisBloggs, said: “I left in March, it was bad enough being ‘self employed’, I was never even applying for a full-time position. Lots of my old customers came to me and they still are, they are showing no signs of ‘drying up’.” |
| At least one rival company has posted on the providentagents.com forum offering disgruntled employees work. | At least one rival company has posted on the providentagents.com forum offering disgruntled employees work. |
| Posts by Provident customers on the company’s Facebook page suggest that some of its 800,000 borrowers are also considering leaving, amid anger at the chaos caused by its technical problems. | Posts by Provident customers on the company’s Facebook page suggest that some of its 800,000 borrowers are also considering leaving, amid anger at the chaos caused by its technical problems. |
| “I’ve been a loyal customer for over 20 years, definitely not going with them any more when I’ve finished paying this loan,” said one. Another wrote: “I’ve used this company for nearly 15 years, on and off, I’ve never known it so bad. Hands up who will be paying off their loans as possible and never taking out another loan with this company.” | “I’ve been a loyal customer for over 20 years, definitely not going with them any more when I’ve finished paying this loan,” said one. Another wrote: “I’ve used this company for nearly 15 years, on and off, I’ve never known it so bad. Hands up who will be paying off their loans as possible and never taking out another loan with this company.” |
| Several customers also expressed discomfort with a new policy of recording conversations between staff and borrowers. | Several customers also expressed discomfort with a new policy of recording conversations between staff and borrowers. |
| In its statement to the stock market this week, Provident also admitted that it is facing a regulatory investigation into its banking division, Vanquis Bank, over the sale of repayment option plans (ROP), a product that helps people to freeze credit card debt. Provident said the product was worth £70m a year in revenues, while it could face claims for compensation if the inquiry by the Financial Conduct Authority finds the ROPs were mis-sold. | In its statement to the stock market this week, Provident also admitted that it is facing a regulatory investigation into its banking division, Vanquis Bank, over the sale of repayment option plans (ROP), a product that helps people to freeze credit card debt. Provident said the product was worth £70m a year in revenues, while it could face claims for compensation if the inquiry by the Financial Conduct Authority finds the ROPs were mis-sold. |
| But industry sources suggest it is unlikely to face a damaging flurry of deposit withdrawals because many of its customers signed up to deals that block them from withdrawing cash for an agreed period, in return for higher interest payments. Its deposit-holders are also protected by the Financial Services Compensation Scheme, a government body that guarantees savings up to £85,000 if a bank collapses. | But industry sources suggest it is unlikely to face a damaging flurry of deposit withdrawals because many of its customers signed up to deals that block them from withdrawing cash for an agreed period, in return for higher interest payments. Its deposit-holders are also protected by the Financial Services Compensation Scheme, a government body that guarantees savings up to £85,000 if a bank collapses. |
| One well-placed source said Vanquis Bank does not have any customers with more than £85,000 of savings. | One well-placed source said Vanquis Bank does not have any customers with more than £85,000 of savings. |