Provident customers who were mis-sold loans will start getting refunds from this week - but for just 4.25% of what borrowers are owed.
Provident Financial Group (PFG), which traded as Glo, Greenwood, Provident and Satsuma, supplied doorstep loans as well as guarantor and payday lending.
It charged interest as high as 1,557.7% APR to borrowers.
Tens of thousands of PFG customers applied for compensation for being mis-sold loans between April 2007 and December 17 2020.
Now the firm's refund arm, the Provident Scheme, is paying out - but only at 4.25% of what customers claimed they were due.
This is a drop on the rough 5% to 10% payout figure the scheme advertised in April.
Are you due a payout from Provident? Let us know: mirror.money.saving@mirror.co.uk
Sara Williams, of Debt Camel, said: "At last the Provident Scheme is Paying out to the tens of thousands of people that made claims about being mis-sold loans.
"When customers were asked to vote on the scheme, many thought they would be paid the 10% that Provident used as an illustration.
"But now they are only paying 4.25%, so someone owed £5,000 will only get a bit over £200.
"This is a very poor result for customers."
A PFG spokesperson said: “PFG customer redress payments are being made by bank transfer and cheque.
"Payments have begun, and bank transfers will arrive from Tuesday (5th July) onwards with all cheques arriving by Friday 15th July.
"Once all redress payments have taken place the scheme of arrangement will close.”
The news will be a disappointment to many Provident customers, who had hoped for higher payouts.
Their only consolation is that 4.25% is slightly better than nothing - and nothing was a very real possibility.
Provident originally asked the High Court in London to sign off on the scheme because it feared being unable to refund all the customers making complaints without running out of money.
The Financial Ombudsman watchdog was siding with customers in three-quarters of complaints against Provident.
The doorstep lending arm of Provident - which offered high-cost loans to people with weak credit histories – had been struggling even before the coronavirus pandemic, losing £21million in 2019.
Just last month high-cost lender TFS Loans was handed a £800,000 fine by for not doing proper checks that customers could pay back loans.
TFS Loans is a guarantor lender, which means it requires a family member or friend to cover repayments if you can’t.
The firm fell into administration in February following claims of “unaffordable lending”.
TFS would lend between £3,000 and £15,000 for one to five years at between 30% and 70% interest, with a representative APR of 39.9%.
But now TFS Loans has been slapped with a massive £811,900 fine by the Financial Conduct Authority (FCA) over its lending practices.
The FCA said: "The FCA found that TFS failed to undertake adequate affordability checks on the guarantors who were liable when borrowers were unable to pay their debts.
"TFS’ failure to collect appropriate information on guarantors’ financial circumstances meant some guarantors were unable to afford the guarantees they entered into, risking significant personal financial repercussions and distress, if those guarantees were called upon. This happened in some cases."
