Provident Financial has been informed that its car finance division is being investigated by the UK Financial Conduct Authority.
A review has commenced into Moneybarn in relation to the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties.
In a statement the company said: “The Provident Financial Group aims to act responsibly in all its relationships, and to play a positive role in the communities it serves.
“The company will work collaboratively with the FCA to investigate the remaining concerns and resolve any outstanding related issues as soon as practicable.”
The FCA granted Moneybarn authorisation to conduct consumer credit activities in June, 2016.
Since that date, the company said the FCA has discussed processes with Moneybarn and it has made a number of improvements, including to the way it deals with future loan terminations.
Provident Financial intends to make a post-closing trading update in mid-January, 2018.
The investigation comes at a difficult time for the lender.
Share in Provident Financial fell this year after a failed restructuring of its doorstep lending business resulted in two profit warnings and the departure of its chief executive, Peter Crook.
Manjit Wolstenholme subsequently became executive chairwoman, charged with turning the business around, but she died suddenly last month.
Malcolm Le May, Provident’s senior independent director, has taken up the role of interim executive chairman.
