Replacing Debt Collectors With Tech Goes Wrong at Provident
- Provident, British subprime lender, plunges as much as 20%
- With fewer salesmen motivated to collect debts, profit sinks
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Companies looking to replace workers with technology might turn to Britain’s Provident Financial Plc to see how it can go wrong.
For more than a century, the subprime lender’s business model saw self-employed salesmen who set their own schedules going door-to-door in working-class areas, doubling as debt collectors when loans came due. In a February revamp, Chief Executive Officer Peter Crook said he was letting those 4,500 freelancers go, replacing them with 2,500 full-time staff whose appointments with borrowers would be scheduled by analytical software, iPads linking them to hands-on, head-office control.