The Financial Conduct Authority (FCA) has begun an investigation into Moneybarn, the self-styled ‘specialist bad credit car finance’ provider.

Provident Financial plc, Moneybarn’s owner, told the stock exchange that it had been informed that the investigation was in relation to the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties.

Provident Financial’s share price was down 10.97% in early trading.

The FCA granted Moneybarn authorisation to conduct consumer credit activities on 3 June 2016 and since that date the FCA has continued to discuss certain processes with Moneybarn and Moneybarn has made a number of process improvements, including to the way it deals with future loan terminations, Provident Financial said.

It said it will work collaboratively with the FCA to investigate the remaining concerns and resolve any outstanding related issues as soon as practicable.