The Central Bank has reprimanded and fined Provident Personal Credit Limited €105,000 for breaches of the legislation relating to certain moneylending practices.

Following an investigation, the bank found, that in relation to 117 loans provided out of the moneylender’s Letterkenny office between 2009 and 2012, the firm failed to advance the full amount of the loan to those consumers that they had entered into agreements with.

The bank said some of the new loans were deducted and used to repay outstanding amounts on loans which had previously been provided to consumers.

“As a consequence, the firm breached its obligation to act in the best interests of its consumers and did not have in place adequate systems and controls to ensure compliance with its regulatory requirements,” the Central Bank said.

The findings have been accepted by Provident Personal Credit Limited as part of the settlement agreement between it and the Central Bank.

“Since the contraventions, which relate to our Letterkenny branch and occurred last in October 2012, Provident Personal Credit has upgraded its procedures and control systems to significantly reduce the risk of this recurring,” the company said in a statement.

The Central Bank found that firm had in place internal procedures and controls that could have denied certain consumers their entitlement to pay off their outstanding loans early under their moneylending agreements.

The Central Bank's director of enforcement Derville Rowland said: "There are around 360,000 consumers of licensed moneylenders in Ireland. Loans from licensed moneylenders are being increasingly accessed by consumers and can be significantly more costly than those provided by other lenders such as banks and credit unions."

Ms Rowland said: “Research conducted by the Central Bank in 2013 found that a quarter of consumers experience difficulties in meeting repayments to their moneylender.”

“The Central Bank views compliance with all requirements imposed on licensed moneylenders as being fundamental to the protection of their consumers, particularly given they may be of limited means. The failure to provide these consumers with the full protections afforded to them by the requirements is unacceptable and viewed as being of the utmost seriousness by the Central Bank.

“The Central Bank does not have a tolerance for licensed moneylenders failing to comply with their legal obligations to “act in the best interests of its consumers” and to put in place the appropriate resources and procedures to ensure compliance with this and all other legal obligations,” she added.