Doorstep lender Provident takes a dive after collectors walk out

Profits at doorstep lender Provident Financial crashed as hundreds of debt collectors “walked off the case early” after a staff overhaul.

The FTSE 100 company replaced its army of 4500 part-time staff with 2500 full-time employees this year but during the five-month transition period, some of the part-time staff decided to give up collecting repayments.

Chief executive Peter Crook said: “Some of our former agents walked off the case early. We’ve had some customers who have not had somebody to call on them to collect the repayment in the normal systematic diligent way we would normally do.”

Profits at the consumer credit division, the centre of the problem, fell to £6.3 million from £43.5 million.

That spurred a fall in total first-half underlying adjusted pre-tax profits, down 22.6% to £115.3 million.

The board is holding the dividend, a sign the company believes the botched overhaul is a blip.

Around 12 in every 100 staff left the case early, Crook said, compared with a rate of around six at other times.

He added that the original assumptions on the rate of attrition had been “overtly optimistic”.

He said: “We put some retention incentive in place for agents who stayed till the end but they didn’t work sufficiently and not everybody stayed.”