Hungarian FSA slams Provident Financial, 13th October 2006

The Hungarian Financial Supervisory Authority (PSZAF) has forced Provident Financial to suspend its business there as a result of serious breaches of regulations. Breaches include failure to follow money laundering rules (by failing to obtain proper details of customer identification and failure to get proper client declarations)and proper accounting policies. The PSZAF has also insisted that Provident provide full employment status to its agents - something that has previously been called for in the UK but which Provident continues to resist here. The PSZAF has handed out a fine of £2,000,000 Hungarian Forints (£5,000) and insisted that an examiner remain permanently on site at Provident's Hungarian business until the matters have been rectified. In the case of the money laundering and accounting breaches,Provident have been given only 15 days to submit a full action plan to address the issues whilst they have been allowed 90 days to sort out the employment status of their agents.

Provident have played down the impact of the regulators actions in the UK press, but has admitted that the actions against them could cost up to £2 million in the current year, £7 million in 2007, and £4 million in 2008.