Shares in Provident Financial lost two thirds of their value on Tuesday after the doorstep lender issued its second profit warning in three months.
The FTSE 100 company now expects to make losses of £80m to £120m after its debt collection rates fell to 57%, compared with a 90% rate in 2016.
Bradford-based Provident recently changed the way it collected its loans, replacing self-employed agents with "customer experience managers".
Its chief executive has resigned.
The company has some 2.5 million customers, many of whom would not qualify for a standard bank loan and are therefore categorised as "sub-prime".
Tuesday's 66% fall left Provident shares at just 598.5p. Three months ago they were worth £31 apiece.
Invesco Asset Management and Woodford Investment Management own about 40% of the group between them.
Neil Woodford, of investment at Woodford Investment Management, said he was "hugely disappointed" but believed that it would ultimately get back on track.
"This business has been around for more than a century and I believe it will be around for many decades to come," he added.
Invesco declined to comment.
The BBC has been contacted by a number of former Provident agents. All of them left when the collection system was changed and many are angry.
They say they had a strong relationship with their borrowers,
One former manager, Mike Thompson, said: "The previous Home Credit model, using local self-employed agents who were friends and relatives of the customers, ensures affordable appropriate borrowing.
"Drafting in customer experience managers working on phone apps has meant that the all-important relationship between agent and customer has been broken."
Provident had already flagged up problems with its new system in June.
At the time, Provident said not enough of its self-employed debt collectors had applied to become employed by the company.
It had also been less effective at collecting money and selling new loans, and a greater number of agents than normal had left.
The company said then it expected profits to be £60m at its consumer credit division.
Provident is undertaking "a thorough and rapid review of home credit's performance", and will not now pay the interim dividend it promised just a month ago.
Its other divisions - Vanquis Bank, sub-prime car loan business Moneybarn and consumer credit brand Satsuma - are trading in line with expectations.
However, Vanquis has been under investigation by watchdog the Financial Conduct Authority, which had concerns about one of its products.
Provident agreed to suspend all sales and is awaiting the outcome of that probe.
Manjit Wolstenholme was appointed as executive chairman, taking over the company from former chief executive Peter Crook. She said: "I am very disappointed to have to announce the rapid deterioration in the outlook for the home credit business."
She added it there was unlikely to be a full-year dividend paid.
Neil Wilson, from ETX Capital, said: "There is no easy way out from this hole. Management will take a long time to regain credibility... The performance is abysmal and significantly worse than management ever could have imagined... Is this the end? There must be some sense that things cannot get any worse."
However, rhe slump in Provident's shares has proved lucrative for some hedge funds, which had been building short positions in recent days. The biggest shorts were held by AQR Capital, Lansdowne Partners and Systematica, filings showed.