(Reuters) - Britain's financial watchdog on Monday imposed a fine of 2.8 million pounds ($3.65 million) on Provident's (L:PFG) vehicle-financing arm Moneybarn, which has paid more than 30 million pounds in redress to borrowers who were treated unfairly.
The fine followed a finding by the Financial Conduct Authority (FCA) that Moneybarn did not treat customers fairly when they fell behind with loan repayments due to financial difficulties in a period between April 2014 and October 2017.
"Moneybarn did not give its customers, many of whom were vulnerable, the chance to clear their arrears over a realistic and sustainable period," said Mark Steward, executive director of enforcement and market oversight at the FCA.
More than 1,400 customers defaulted after entering into what the FCA termed "unsustainable" short-term repayment plans.
Provident said later that Moneybarn had finished a redress programme to compensate all potentially affected customers in the third quarter of 2019.
Moneybarn did not dispute the FCA's findings and the regulator said the fine would have been at least four million pounds if the company had not compensated customers.
Provident shares tumbled to session lows following the FCA announcement. By 1112 GMT, they were down 2% at 460.7 pence on the London Stock Exchange.
The fine marks the end of an investigation that began in 2017 for Provident, which provides credit to people who do not meet the lending criteria of mainstream banks.
The sub-prime lender successfully rebuffed a takeover attempt by smaller rival Non-Standard Finance (L:NSF) last year and has since set out to return its troubled consumer credit division to profit.