Provident Financial shares plummet after being fined for mammoth spam texting campaign

Oliver Gill
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Provident Financial is to report on its third quarter trading on Friday, 13 October (Source: Getty)

Shares in Britain's biggest doorstep lender Provident Financial plummeted after being fined £75,000 by watchdogs for a mass text message and email spamming campaign.

Subsidiary Vanquis Bank sent 870,849 spam text messages and 620,000 spam emails to promote its credit cards, the Information Commissioner's Office (ICO) said this lunchtime.

The lender broke the law because recipients had not consented to be contacted, the ICO said.

Shares in the London-listed firm fell earlier today but the announcement at 1pm prompted investors to take cover with the company's stock falling almost eight per cent.

Provident Financial apologised for "any irritation this has caused" and said Vanquis had not deliberately spammed customers.

Read more: Provident pays £120m back to retail investors

The fine comes as another blow to the firm that was relegated from the FTSE 100 last month after one of the biggest one-day sell-offs in blue-chip history.

Among its other problems is a separate probe into the mis-selling by Vanquis of PPI-style products.

The Financial Conduct Authority (FCA) is investigating how Vanquis flogged a Repayment Option Plan (ROP) service. Analysts have estimated the fall-out of this scandal could cost Provident £300m in fines and redress payments.

Provident is due to report its third-quarter earnings this Friday, which investors expect will include an update on staff discontentment, ailing loan collections and loss-making activities.

Provident Financial said in a statement on today's fine:

The contravention involved sending SMS text messages and emails to customers advertising the company’s product between April 2015 and September 2016 without the necessary permission to do so. Vanquis Bank is sorry for any irritation this has caused to the individuals concerned. Although the ICO found that Vanquis Bank did not deliberately contravene the regulation, Vanquis Bank takes this contravention extremely seriously. The Bank has reviewed its marketing processes and put in place steps to ensure that contraventions of this nature do not occur again, including no longer working with the third parties concerned.

Read more: Hundreds of Provident Financial agents 'happily' jump ship to rival

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