Following a 66% share drop, hundreds of thousands of families that lend off Provident Financial have been placed in limbo, as the firm collapses due to a glitch.
According to reports, a software bug made it impossible for Provident Financial, a blue-chip FTSE 100 company, to collect debts from clients. This resulted in a 66% drop in shares within a day, bleeding £1.7 billion out of the Bradford based company’s gross value.
It’s now considered to be the biggest ever one-day stock price fall for such a firm. The company CEO, Peter crook, immediately resigned. The whole ordeal has also resulted in several investigations and the axing of its dividends.
On top of this, the 137-year-old company’s customers, mostly vulnerable low class families with very little income, will be affected.
The software that created the bug was introduced following a £21.6 million overhaul of the firm’s doorstep collection business, which collects customer debts on loans with up to 535% annual interest. A rehiring of staff fell flat and failed the firm, then an appointment system software that was introduced also failed to improve efficiency, all in all letting the company down when it came to meetings with clients, and therefore slumping profits.
According to the Daily Mail, Chairman Manjit Wolstenholme, who has taken over the daily responsibility of the company after Crook resigned, said: “We’ve got people on the ground, but we have issues with the software being used by them. Agents are turning up at the wrong time when customers aren’t there.
“It’s not behaving because the data that’s in there isn’t good enough for what we need to do. This is something we should be able to do something about.”