Provident makes U-turn over debt collections

Struggling doorstep lender Provident Financial staged a mini-rally today after beefing up how much it has retrieved from customers and re-hiring part-time collection staff.

The former FTSE 100 member said it had collected 65% of the money it lent in September, up from 57% in August.

That’s still below the 90% it achieved last year but is an improvement under new collections chief Chris Gillespie, who was hired to try to fix the home collection business last month.

“A recovery plan has been developed and a number of actions implemented to… provide the foundation for delivering the necessary improvement in customer service and financial performance,” said executive chairman Manjit Wolstenholme.

Shares in the company, which collapsed after a profit warning and regulatory probe in August, rose 17% — up 135p to 924.85p — to their highest level in six weeks. The company replaced 4,500 part-time collection agents this year with 2,500 full-time staff but the overhaul backfired spectacularly with customers complaining no one had arrived to collect their cash.

To recover, the firm has tried to move away from strict routes for agents who walk round collecting the money and re-hired 300 part-time agents. Peter Crook quit as chief executive after the debacle. A search for his successor is still underway.

The firm is also under investigation by the Financial Conduct Authority over the sale of PPI-type products at Vanquis Bank, its lending arm, but had no further update today.