UPDATE – in May 2022, the court approved the new Amigo Scheme.
See Amigo’s Scheme for details
On 13 December 2021, Amigo proposed its new Scheme of Arrangement.
The Practice Statement Letter (PSL) is a 21-page overview of the new Scheme. The numbers in the PSL have now changed
Amigo says:
We hope a successful new Scheme will also allow a changed Amigo, under a new management team, the opportunity to bring forward a new, regulated lending proposition for a segment of the market where options are diminishing and demand remains high.
The timetable for approving this Scheme is;
- A court hearing on 16 February 2022 will consider the voting arrangements. This was changed to 8 March.
- Customers will then be able to vote on the new Scheme.
- A court hearing to consider the fairness of Scheme 2.0 is expected to be held in late April 2022. This was changed to the 23 & 24 May.
This article looks at how the new proposal differs from the first Scheme, rejected by the court as unfair to customers. Also, where has the extra money come from? And is this now fair to customers?
Contents
The story so far
Affordability complaints and the first Scheme
A loan is only affordable if someone can repay it and still pay their other bills, debts and living expenses. For Amigo’s guarantor loans, this test has to be passed by both the borrower and the guarantor at the time the loan was given.
Amigo affordability checks were often inadequate so it was losing 88% of cases at the Financial Ombudsman (FOS) in 2020.
Amigo couldn’t afford to carry on paying refunds, so it proposed a Scheme of Arrangement in December 2020 to cap the money it had to pay for mis-sold loans. It estimated customers would receive 10% of their calculated refunds – that looked optimistic to me.
Schemes have to go through a three-stage process to be approved. In the case of the first Scheme:
- A court hearing approved the voting arrangements for creditors affected by the Scheme – in this case the Amigo customers who had affordability complaints.
- A large majority of creditors who voted were in favour of the Scheme.
- A second court hearing considered the fairness of the proposed Scheme and the creditor voting and it was rejected.
Why the first Scheme was rejected
Amigo’s previous Scheme was rejected in May 2021 after the FCA opposed it saying:
- the proposed Scheme was too generous to shareholders, who would lose everything in administration, and not fair to customers who would only get a very small proportion of their proper refunds;
- Amigo was not likely to go into administration in the short term, so there was time to negotiate a better Scheme.
The FCA was right – Amigo did not go into administration when the first Scheme was rejected. Since May Amigo has been constructing an alternative Scheme. It set up a committee of 8 customers who were asked which of various options they would prefer.
The new Scheme – it’s complicated…
There are several options
The second Scheme is a lot more complicated than the first one. There are two separate options to be voted on by customers:
- New Business Solution (which may collapse into what the PSL calls the Fallback solution); and
- a Wind Down Solution.
The New Business Solution is Amigo’s preferred option, the Wind Down will only be considered by the court if the New Business Solution is rejected. If neither solution is approved by the court, Amigo will go into administration.
Schemes are not usually structured like this. One criticism of the first Scheme in court was that the documents were not easy to understand for customers – that is going to be even harder with this unusual double-scheme structure.
The Practice Statement Letter (PSL) gives a summary of the options. We won’t know the full details until the Explanatory Statement is published – last time this was not available before the first court hearing.
The numbers in the PSL are now out of date.
The full Explanatory Statement has different numbers –
this makes administration look a more attractive option than it was.
See Amigo’s new Scheme – which way should you vote? [LINK] for details
Here is my summary of what Amigo has said about these options:
Name
estimated money
estimated redress
Old Scheme
15m-35m (+ profit share)
10p
New Business
112m
42p
New Business Fallback
?
unknown
Wind Down
?
29p
Administration
?
24p
Future lending
Under the New Business solution, Amigo would continue as a lender.
But the PSL does not go into much detail about what will happen under the Fallback and Wind Down options. It doesn’t say if Amigo’s parent company will still continue in business even though the subsidiary that currently gives loans is closed.
I think this should be made clear to customers.
The New Business solution may fail in practice
The New Business solution will only succeed if two conditions are met after the Scheme starts:
- Amigo recommences lending within 9 months of the Scheme starting – this can only happen if the FCA agrees. The FCA is currently assessing if Amigo’s proposed lending will meet the necessary conditions to be approved ; AND
- Amigo raises at least £70m of finance within 12 months of the Scheme starting. Only £15m of this is going into the Scheme to be paid as redress to customers, the rest is for future lending.
So this may not be known until May 2023. Until it is known, no payments can be made by the Scheme.
If the New Business option fails, it changes to the Fallback Scheme which is a version of the Wind Down option.
The PSL doesn’t estimate what customers may get from the Fallback. It depends on when and how the New Business option fails and what Amigo has spent before the failure point. Amigo has NOT said it expects the Fallback will pay out more than the Wind Down or administration options.
It is possible customers could actually end up with more money if they opt for the Wind Down now or reject both scheme options and let Amigo go into administration.
42p sounds like a lot more money but how is it calculated?
42p is an estimate. It could be more, it could be less.
But the PSL says nothing about how the 42p figure was arrived at. You can make this number anything you want by playing around with the figures going into the calculation!
I thought Amigo’s estimate of 10p in the £ in the first Scheme was very optimistic – it could only be right if either few people complained or Amigo rejected a lot of the complaints, many more than the Ombudsman would have.
This matters – a lot. People may vote on the Scheme on the assumption that 42p is right.
I think Amigo needs to be open about the important numbers in the redress calculation:
- how many customers does it expect will make a claim?
- what percentage of claims does Amigo expect it will uphold?
- will Amigo still be applying the unfair “deduction for unpaid interest” that reduces, sometimes dramatically, the refund a customer will get if only their later loans are decided to be unaffordable?
Amigo has said it expects to uphold 65% of claims – but it isn’t clear if that includes cases where it only upholds one loan even though the customer had several. When cases were going to the Ombudsman, 88% were upheld, and the very large majority were for all loans someone had.
Most of the extra money comes from current borrowers NOT shareholders
Amigo is proposing to raise £70m from shareholders, but most of that is for new lending – only £15m will be paid into the new Scheme.
It looks as though the larger amount to be distributed in cash has come mainly from the pockets of the current borrowers.
Amigo had revenue of about £100m from loan repayments by current borrowers in the first 9 months of 2021 and continues to get more every month.
Many of those current borrowers will win complaints in the new Scheme or in administration. They will have lost out badly by this if they win their affordability complaint because balance adjustments are paid “in full” but cash refunds are only paid at a small percentage.
The FCA has ignored the plight of these customers by allowing Amigo to halt complaint handling. Amigo has been telling customers they have to continue to pay. Amigo’s texts and emails have scared many customers into making unaffordable payments to a debt they may not even owe after their complaint is decided.
Amigo could correct this injustice if it wanted to
There is a simple way to put right the harm that has been done to the current borrowers.
The PSL says on page 8 that a Trust Account is being set up for payments made from the end of November 2021. So any payments from now for people who have already complained will be reimbursed in full from now on if a complaint is upheld.
I think this Trust Account should be changed so that it contains all payments made from the announcement of the first Scheme a year ago.
Of course, this would result in the headline “pence in the pound” cash redress paid in the second Scheme dropping considerably. But that would be a fair reflection of how much customers are losing from this Scheme and how little shareholders are contributing.
I hope the FCA will insist on this change to the Trust Account being made.
Is this second Scheme likely to be approved?
What will the voting arrangements be this time?
There was little discussion about the voting arrangements in the first Scheme as the details were hidden away in the long Explanatory Statement which customers only saw after the court hearing that considered the arrangements.
Each creditor’s vote was weighted. This weight was set at the amount of cash redress that would be paid if all loans for the customer were upheld.
That may sound superficially fair… but the vote of a customer who had not yet repaid more than they had borrowed was given a weight of just £1. So the customers who had least to gain from the Scheme and who may have considered they would prefer Amigo to go into administration were effectively disenfranchised.
Perhaps the voting arrangements will be fair this time and reflect the total amount of redress a customer may get, including balance reductions. I hope the FCA will be looking at the details of this as it will see the Explanatory Statement before the first court hearing and could object to the weighting.
What will the FCA say?
The PSL sets out the FCA’s current position. Here is my summary of this:
The FCA has only recently been given the PSL and does not yet have the full details. It may decide to object in court. And it’s trying to assess if Amigo meets its standards for future lending – the FCA may impose requirements which could mean Amigo thinks the Scheme is no longer viable.
So that is unknown!
Is this really a fairer deal for customers?
The judge who rejected the first Scheme concluded by saying:
The FCA expects the directors to continue to explore and promote a restructuring which fairly allocates the benefits and losses among the various stakeholders. I agree with that.
Does this new Scheme fairly allocate the benefits and losses between the customers and the shareholders?
It doesn’t seem to me that it is much of an improvement on the first Scheme, with most of the “extra money” coming from the payments made by current borrowers and only an extra £15m coming from shareholders.
So this isn’t really “extra money” – it is just redistributing money so the current customers get a lot less and the previous customers get a bit more.
The other major problem is that Amigo has given no clues about how it came up with the 42p number.
42p could turn out to be very optimistic. It is essential customers are told the assumptions this estimate was based on. Otherwise they can’t assess how fair this proposed Scheme is.
Comments on this article are now closed.
Please leave comments on the new Amigo’s Scheme – waiting for claims to be decided which will be kept updated.
Ruth says
Hi Sara,
I emailed Amigo about equitable set off, below is the email I received. If I pay the outstanding amount, what happens if they go into a scheme or administration please?
We introduced Equitable Set Off for customers who do not want to make payments to Amigo whilst they have an active lending complaint, part of the criteria for this is that you need to have paid back at least the loan principle.
After reviewing your account I note that you are not currently eligible for equitable set off as you have not paid back the loan principal yet. You have £251.11 remaining before you have paid back your loan principle, once this has been paid you would then be eligible to choose to exercise your right to set-off, if you felt this was the best option for you.
We’d ask for you to get back in contact with us, once these payments have been made, and we can then discuss further options with you. For more information regarding Equitable Set Off, please call our dedicated team regarding this issue on 01202 629798 to discuss this in more detail.
Sara (Debt Camel) says
They are doing this in anticipation of going into a Scheme – it won’t make any difference.
I would expect the same would happen in administration but there is nothing written down about this. Administrators have no way to make you pay, they couldn’t possibly take people to court before claims have been resolved. Administrators are pretty realistic – they want to get through the whole process with as little effort as possible, as everything they do costs money and reduces the amount available to creditors. So they tend to take short cuts, I can’t imagine thay would start hassling thousands of people over small payments they may not even owe.
Paddy says
Hi
I have been accepted for the Equitable set off, alongside my guarantor, can you advise what my guarantor needs to do (or say) to the bank in order to ensure no payments are taken, just don’t trust Amigo
Sara (Debt Camel) says
cancel their direct debit and also phone their bank and ask for the Continuous Payment Authority over their debit card to be cancelled.
aden says
Hi All
after 4-5 months of not paying amigo and with a complaint logged by me and guarantor. i and guarantor have had a message from them to say they want to help me get debt free.
Does anyone have expeience of this and know what they mean.
Sara (Debt Camel) says
at a guess, they think it would be great if you start paying them again…
Jimmy says
I haven’t paid Amigo in a few years now, my claim original complaint was not accepted with them. I clearly know I owe them the money, i had an original loan and top up. I believe with administration I could win a claim to have interest removed and it off my credit file. How likely do you think they will go into administration? Also is there anyway I could make an arrangement with them now to have this happen as start paying them back? Thanks
Sara (Debt Camel) says
Did you send your complaint to the ombudsman?
Have they been asking your guarantor to pay?
Jimmy says
No I never sent it to the ombudsman, I thought I did but can’t find that email anywhere. No they haven’t contacted either of us about payment. I think I last paid early 2019 and my account is in arrears not even default.
Sara (Debt Camel) says
I don’t know if you will be able to make a claim to the proposed Scheme.
It is very odd that you haven’t been contacted about making payments. Are you able to afford much?
Jimmy says
Yeah I got the email about the scheme but if it were to end up in administration I’d be able to put a claim in there? I literally only want it off my credit file, it’s by far the worst thing there and it hasn’t even defaulted so it’s just in arrears near 3 years now.
I could probably afford 100 to 150 a month it’s roughly 5500 to be paid off. It was 216 a moth when I stopped paying.
Sara (Debt Camel) says
You may well be able to make a claim in administration – some payday lender administrations have let someone make a claim when the first one was rejected. if this upheld any negative marks will be removed and in practice miost administrators simply delete the credit record.
If Amigo doesn’t go into administration you can also make a complaint at some point that your credit record has been reported incorrectly as a default should have been added when you were 6 months in arrears. Again it is not clear at the moment if you will be able to make this claim in the Scheme.
Do you have other high cost debt at the moment? If you do, it may be a better idea to pay that off and not offer £100-£150 to Amigo as that may make them wake up and start asking your guarantor for the rest…
Sam says
Hello
Looking for advice please.
Currently have a loan with Amigo, along with a complaint with the FoS.
Also i am on equitable set off with Amigo.
However i will be in a position to clear the balace/and arrears with Amigo.
Would it be recomended to clear and close the loan? Or wait it out until the scheme has rolled out?
Just want to be rid of these vultures however looking for advice on a route to take.
Thank you
Sara (Debt Camel) says
This depends on the rest of your financial situation. They may be vultures but they are no longer pecking at you…
Do you have other high cost debt – can you also afford to clear that?
The money – is this yours, or are you being given it or loaned it by a realtive?
Sam says
Hi Sara.
With the money it will clear all my debts and it is a gift from a family member. Im just unsure what to do with Amigo.
Pay the balance and arrears and be done with them. Or ride it out and await the verdict from the scheme.
Would paying the balance jeopordise my complaint as it was unaffordable and still is. Im just fortunate to now be in a position to pay in full but i dont want that to go against me.
Sandra says
Hi Sara I’ve also had an email about This new scheme, my complaint has been with fca since august 2020 which is a long time they have emailed me on a few occasions and said they can’t look into it at the minute with proposing new schemes etc all the time but they did agree that four out of the five loans were not affordable, there anything I can do to make it speed up as I really don’t know what else I can do, thanks
Sara (Debt Camel) says
do you still owe a balance?
Sandra says
Hi Sara I’ve payed well over what I owe to them Obviously cause of the interest rate they have which is ridiculous so if anything they would owe me money
Sara (Debt Camel) says
Only looking at the last of these loans, have you paid more to that than you borrowed?
Sandra says
Yeah payed a lot more on it, I’m just wondering where I stand with it all the fca said the first loan was affordable but the last three top ups definitely were not I have the email they sent me but they aren’t looking at it anymore at the minute with all that going on, so I’m left lingering what to do. They haven’t asked me for payments which is great but I definitely know that I’ll get a lot of money back if they upheld my complaint amigo that is.
Sara (Debt Camel) says
the FOS decision was just an adjudicator decision. I don’t think there is a way you make Amigo accept this at the moment, you just have to wait for the Scheme to start or it to fail and them to go into administration.
Sandra says
Do you think they will go into administration? It’s so hard to know what will happen I guess!
Sara (Debt Camel) says
I think it may depend on what the FCA says.
Vicky says
Hi Sara
I’ve just had a complaint upheld by bamboo and am having the account closed and a refund of interest issued to me. I’d like to do the same with amigo, what’s the chances?
Sara (Debt Camel) says
have you made a complaint? Are you still paying a loan to them?
Vicky says
No I haven’t made a complaint and yes I’m still making payments
Sara (Debt Camel) says
the last loan – have you paid more to it than you borrowed?
Vicky says
Yes most defintely… the original loan amount was for £3000 in 2018, the balance is now £2100 4 years later!
Sara (Debt Camel) says
ok so you know what an affordability complaint is and you know if this Amigo loan was unaffordable. If it was, send them a complaint immediately – this can be very short, just one sentence, as the article above says. Amigo will not look at this now until the new Scheme starts (or they go into administration) but you want them to have a complaint on their books asap.
Can you afford to keep paying the monthly amounts now – without that bamboo loan it may be easier?
or do you need to stop?
As you have paid more than you borrowed, you can ask Amigo for “equitable set off” – this lets you pause paying and they will not ask your guarantor to. It harms your credit record, but any negative marks are removed if you win the complaiont. it does not harm your guarantor’s credit record.
Vicky says
Yes I can still afford to pay it, just annoying at the fact I’ll have probably paid double what I borrowed!! Is it best to carry on paying whilst an affordability claim is in?
Sara (Debt Camel) says
once your complaint is in (ie today!!!) any payments you make go into a trust account and if you win the complaint you will get them back in full, not at whatever small percentage Amigo ends up paying.
So if you can afford to pay them without having to borrow more, then this is best. but if you can’t (energy bils rising?) then equitable set off gives you much the same except you don’t have to pay… the onlty disadvantge being the harm to your credit score.
Megan says
Hi Sara,
Just wondering if you know if there’s chance of any interest redress in this situation? I took out a loan back in 2015 and my nan is the guarantor. Long story short I couldn’t afford repayments as I was only 18 on an apprenticeship and the company went bust and neither could my nan as she only gets state pension and benefits. so they took her to court and got a ccj in place and charge against her house. The ccj was for £50 a month which I have paid every month since and not missed any payments. The original loan amount is nearly paid off but still a few thousand interest on there. We logged affordability complaints years ago but they was rejected so I relogged one last year and just keep getting emails saying we aren’t dealing with complaints till the new scheme proposal. I just want this Amigo debt gone asap as my nans getting on a bit now and I’m worried it won’t be paid off before she dies and the charge on her property and debt will be still in her name.
Sara (Debt Camel) says
What was Amigo thinking of giving you a loan and accepting your nan as guarantor!
I hope you will both be able to make claims under the new Scheme Amigo is proposing but until we see the detailed terms we can’t be sure.
Mark says
Hi Sara,
I’ve been reading through a lot of comments on this page… all very helpful but wondered if you can confirm this for me please.
So I made an affordability complaint to amigo back when this first started… it all went through ok just got to wait to see what the outcome is with this scheme like everyone else.
I’m still paying them as I am able to afford the payments but only because I pay through a debt management plan (step change)
I’ve noticed that you’ve mentioned a trust fund a few times on here recently, would that apply to me too?
Because all my debts apart from amigo loans have now all been paid off… all of the money that was divided between my other creditors is now solely focused on paying amigo loans, and it turns out I’m now actually paying them more than what my original payment was to them when I took the loan out (original payment £220pm now £340pm) because they are now the last on the list to pay off…
Is that money being held in a trust account? And if the complaint goes through will I get that all back?
Thank you
Sara (Debt Camel) says
I hope your payments are now going into the trust account set up in November.
Can you afford the current DMP payments? Or are higher expenses eg food, petrol, bills, making this difficult?
Mark says
Me too, is there any way in finding out if they are going into the trust account?
Yeah the dmp is affordable… I highly recommend step change for anyone struggling with debt.
I will be debt free June 2023.
Sara (Debt Camel) says
Well you can ask them. But they should be, because you have made a complaint.
DC says
Hi Sara, just wondering your thoughts if scheme goes ahead and Amigo continue to deduct unpaid interest from redress. Would the negative marks on credit file still be removed if for some reason the last loan was not upheld or left a remaining balance less than the payments withheld under equitable set off?
Sara (Debt Camel) says
if the last loan is upheld, any negative marks on it should be removed (NB I can’t be sure what will happen, I am saying this is what ought to happen.)
If the last loan is not upheld, then there is no reason to remove negative marks. I don’t see that the payments withheld under equitable set off are relevant to this argument?
And I am not sure where unpaid interest comes in? I suppose if you had three loans and Amigo upheld only the middle one, there could be unpaid interest and the last loan not upheld. But I am hoping the Scheme won’t come up with such daft decisions. And if it does, you should appeal it immediately.
Amy says
Hi I am currently still paying an Amigo loan I put in an affordability complaint a while ago which they dismissed so I put in a complaint with the ombudsman but as things progressed thee we y couldn’t go any further could you advice what would be the best way forward my daughter is my guarantor so don’t think stopping payment will help
Sara (Debt Camel) says
how large was this loan? Do you know how much in total you have paid to it?
(if you had previous loans, they may also have been unaffordable but here I am just asking about the current loan.)
Amy says
I asked amigo for a full statement so I could work out how much I had paid but nothing ever came I think the last loan was £5000 and I’ve been paying £213 a month for a long while now I just wondering what is the best way forward with it in December I had covid and couldn’t pay they said I had £115 of credit I no my account and could I pay £108 this month which I’ve done but I have explained that my husband is now unable to work due to I’ll health so our income is no where near what it was when I took out the original loan and still not had any help
Sara (Debt Camel) says
can you go back through your bank statements and double check what you have paid? I am sorry but this makes a difference to what your options are at the moment.
Amy says
Hi again I topped up so started with a £5000 loan on 13-11-2019 I have so far paid back £4048.72 back
Sara (Debt Camel) says
ok, then you haven’t repaid more than you have borrowed, so Amigo won’t agree to you pausing payments until your complaint is decided (what they call Equitable Set Off).
Can you afford the current payments you are making?
Dee says
Can I have some help please, I got a loan out with amigo, also having a top up because i had a few loans out to pay for my loan to amigo.
My loan has had excessive charges combined onto the original loan borrowed. I wasn’t made aware of when agreeing to the loan, such as the high interest and charges even during a pandemic I had reached out to amigo and I needed my payments held. As i lost my job.
I haven’t been able to be financially stable and had to get other loans to help pay some bills due to the High repayment I have to pay each month to Amigo of £395.25. It wasn’t made clear to me that it was interest I was paying off first before the loan, had i known that I would have never applied for the loan or even agree to such a contract. I was mislead and unhappy. My loan is unaffordable and I have had to get other loans and credit cards to help pay for other living expenses in the past.
Amigo had lent to me irresponsibly, this loan has impacted my past few years with a-lot of stress, money problems & could potentially affect me buying a property as a first time buyer in the future which I wasn’t made aware of. I also wasn’t made aware that this loan affects my credit score.
I don’t want my guarantor to be informed of this complaint, I also want to carry on making my normal monthly payments because I don’t want my guarantor to be affected or my credit score damaged in any way.
Sara (Debt Camel) says
You can make a complaint to amigo that the loans were not affordable, but still carry on making the repayments if you can manage to do this.
This is worth doing – in fact it is urgent. See the Send a complaint to Amigo ASAP section in the article above for why and what to do.
Your guarantor should not be informed.
But can you still manage to pay this? By taking out more high cost loans, you are making your financial position worse, not better. You could win your Amigo complaint and still be stuck with all the extra borrowing. And with energy bills rising, Natiuonal Insurance going up in April, petrol, council tax, food all costing more…
You can also look at making affordability complaints to other lenders you have borrowed from. See https://debtcamel.co.uk/refunds-large-high-cost-loans/ for large loans and https://debtcamel.co.uk/refunds-catalogue-credit-card/ for complaints about credit cards, and overdrafts.
Simon Harmer says
Hi Sara,
My father in law had initially taken a, £3000 loan with amigo and had asked my wife to go as a guarantor to which she agreed without the ludicrous interest rates being fully explained and thought that was that until he passed away last year. Amigo then chased us after the debt which had top ups and accrued interest which had racked up as he was dead. The total was now £12000.
After receiving a couple of threatening letters and with the amount increasing daily, I succumbed to the pressure and got a bank loan to pay it off.
I immediately launched a complaint with amigo and the ombudsman looking for redress as my father in law was in his 60’s, unemployed and had terminal cancer and should never have been even considered for such a loan.
I am now stuck in limbo, waiting to get the chance to vote on our future.
This company doesn’t deserve to lend anyone another penny and I sincerely hope they fail to get their new business scheme even if it means that I only get a fraction of what I paid them back!
Regards
Simon
veronicca772 says
Hello.
I already made a claim for Amigo.
When I missed my payment in January they still said that quarantor would have to step in if I don’t make the payment.
Would you know how do I have to stop paying Amigo, and how can I stop them to contacting quarantor at the same time?
Sara (Debt Camel) says
the loan (the last loan if you have had more than one) – how much did you borrow? how much have you paid to it so far?
Carly says
I have had 5 Amigo loans, the original and top ups. Two top ups were done within the space of 6 months and 7 months.
I am struggling big time to repay the £375 every month but I can’t do an equitable set off as my guarantor is now very ill and facing a life changing surgery. I don’t want him stressing over this damned loan so I continue to pay leaving me short for other basic bills.
I have a break down of what was borrowed when and how much was repaid to Amigo but I don’t know what (if anything) would be applicable in my complaint.
I was, like many of us, desperate at times and used top ups to cover other bills that were falling behind. I don’t think I never sent a payslip to Amigo and the top ups took no time over the phone. Now I’ve paid back over £10,000 on the last loan alone and still owe £9500! It’s depressing and I feel like this is designed in a way that I’m never going to have it repaid.
Below is a time scale of loans and amounts repaid but if my claim is accepted, will the smaller amounts of interest I paid on the shorter loans be taken into account or bulked into the last loan as they were top ups? Do I need to make an individual complaint against each one or will they automatically be on the system?
£5000 loan, made 22 payments = £4334
£6000 loan, made 7 payments = £1659
£7500 loan, made 6 payments = £1776
£9000 loan, made 29 payments = £10295
£9500 loan, so far repaid £10,875 with over £9000 still to repay.
Sara (Debt Camel) says
1) You MUST send in a complaint straight away as this will protect any payments you make from now on – send a very short email to hello@amigoloans.co.uk with COMPLAINT as the subject. Just say you want to make an affordability complaint about your Amigo loans. Amigo is not going to look at your complaint before the Scheme so there is no reason to write a lot. Don’t think or hesitate to do this, it is the right thing to do whether else you decide to do.
2) This sounds like a situation where you CAN do equitable set off – you have paid more to the last loan than you borrowed. This would pause your payments until your complaint is settled AND they will not ask your guarantor to pay.
Read https://debtcamel.co.uk/stop-paying-amigo-set-off/. It is going to be a long while until your claim in a scheme is considered – may well be the end of the year or later. With bills and prices going up, can you really manage to keep paying this? Several tops quickly is often a sign of a very strong complaint.
3) to answer your questions – Amigo in the Scheme (or the administrators if the Scheme doesn’t go ahead) will look at each of your loans and decide whether to uphold it as unaffordable or reject it.
If the earlier loans are upheld, the interest paid on those helps to clear the balance on the current loan.
A normal complaint is about all your loans. (You could complain about just one, but normally it was the fact the earlier loans were unaffordable that meant you had to keep getting top ups!)
4) one problem with having a lot of top ups is that Amigo may not make a fair decision on your case and may only uphold the last loan or two. In this case they normally make a deduction “for unpaid interest” – this is unfair, no other lender does it, and the Ombudsman says it isn’t right. Sometimes this on;t reduces your refund by a couple of hundred pounds but I have seen some people had their refund cut by £3,000 or more…
Because of this, when it comes to a vote you may decide you don’t want Amigo to make a decision on your case and you would prefer them to go into administration.
In administration you will be able to get your balance reduced in exactly the same was as in the Scheme.
Carly says
Thank you Sara.
I do have a complaint already lodged with them so I just sit tight for now?
It’s the constant texting and emailing to my guarantor that puts me off doing the set off because he is no position to be worrying about anything else. I assume they will still do that if I don’t pay?
Sara (Debt Camel) says
Read the page about Equitable set off – they should NOT ask your guarantor to pay if Amigo agrees to this pause on your payments: https://debtcamel.co.uk/stop-paying-amigo-set-off/.
Abbie says
Hey! So when I took out my loans with amigo,
They never checked my bank statements, if you look back I had a very bad gambling problem and would Spend £100s a day. Does this mean I’m likely to win my complaint with amigos as they never checked and if they did they could see I would struggle to pay it back?
Sara (Debt Camel) says
Did you have several top up loans?
How large was the first loan and what was your credit record like at that time – recent missed payments? Recent payday loans? Rising level of debt?
Dale says
Hey Sara, I have a loan with amigo, I got 500 and then bumped it up to 10k in under a year. During this time amigo didn’t check any of my statements or do full on checks. I’ve paid back alot, but it says I have around 13k left to pay.
I started a claim in 2020 when I heard about all this through a claims company, amigo have acknowledged this, and during the pandemic I managed to get my payments reduced from £395 to £200 per month.
Question is, do I vote for or against the scheme? I’m not bothered about getting any money back, I literally would just prefer to pay back the exact amount I borrowed and shrug off the interest.
I heard everything paid since a claim is made is put into a pot to return to you if you claim is upheled..
I wasn’t in a good financal space in 2017 -2018 when I took out the loans but managed too anyway. I’m still not prefect now, amigo is draining
I’ve not been asked for any evidence as in bank statements and such as of yet, but I guess that would be the next process?
I would just love to get it cancelled and wiped off my credit file.
When I make reduced payments they mark my credit file every month to say I missed payments when infact they’ve been paid every single time
Just looking for advice! Sorry to bother you all.
Sara (Debt Camel) says
I got 500 and then bumped it up to 10k in under a year.
That sounds like a strong claim! But the first loan – and other intermediate top up – may not necessarily be upheld, there is always the worry that Amigo will only uphold the last loan.
If Amigo doesn’t uphold earlier loans, then it may well apply a “reduction for unpaid interest” – this is an unfair reduction that only Amigo uses, the ombudsman says a lender should not do this. For some people it is only a few hundred but I have seen cases where it is over £3000.
it says I have around 13k left to pay.
Can you add up how much you have paid to the last top up loan? Is it more than £10,000
I’ve not been asked for any evidence as in bank statements and such as of yet, but I guess that would be the next process?
We don’t know yet what the procedure to make a claim will be. My guess is that you won’t have to supply bank statements, but if your claim is rejected and you want to appeal then you will be asked for – and should want to supply – any evidence. So this would be a good time to assemble that evidence so it is there if it is needed.
Question is, do I vote for or against the scheme? I’m not bothered about getting any money back, I literally would just prefer to pay back the exact amount I borrowed and shrug off the interest.
There are actually two Schemes. If you vote against both, you are effectively saying you would prefer Amigo to go into administration so the administrators would decide your claim, not Amigo. In administration you would be able to get the same right of set off, reducing your balance, that you could in the Scheme.
Amigo says there will be more money to distribute in the Scheme, but (a) you say you don’t care about that and (b) it isnt clear to me whether you would get any cash refund anyway – having your balance reduced may be the best you can hope for. And that would be the same in any Scheme or administration.
I’m not saying at the moment what I think people should do until I have seen the details – what has been circulated so far is too vague.
L says
Hello,
I had a whole thing with amigo and settled for a fraction of what I should. I thought I couldn’t vote on the scheme and (due to other things), haven’t been keeping up-to-date. However, I keep getting emails and texts about it. I still can’t vote, right? This may be in the long information that is not making sense to me right now. Wondered if others who settled are getting these?
Sara (Debt Camel) says
At the moment this isnt totally clear.
It may well be that you can vote and put in a claim. The PSL says you do not need to but it does not seem to say that you cannot… I am trying to get this clarified. If you can make a claim, then any money you had already been paid would be deducted from the calculated redress and you would only get a proportion of the remainder.
L says
Thanks, Sara.
In one way, that’s good news. I can claim what’s owed. But I can’t help think this may open people up (those who have settled for pittance) to their claim then being not upheld – when it had been by the ombudsman – and being asked to repay tge settlement amount. I don’t even know if this would be allowed, but with Amigo, there’s always a scam.
Also, if we want to submit testimonials, when do we do it by and to whom?
Sara (Debt Camel) says
No, they won’t be able to unpick a previous settlement. A new claim in the scheme (if you can make it, I am not yet certain) can never make your position worse.
What do you mean by testamonials?
L says
I’m not sure if the last comment sent because I double-clicked, so just ignore this if it did.
I wondered if they added unpaid interest, if I could end up owing them.
If I wanted to write a statement about how their behaviour affected me, would I send this to their solicitor? I think I remember something like this before. I’m not up to it yet, but feel it important to make an impact statement (if that’s possible?).
That’s very good they couldn’t make the position worse.
Sara (Debt Camel) says
you can email the solicitor who has been appointed as the consumer advocate at jy@amigoca.co.uk
Sue says
I just got in touch with amigo to ask for equitable set off , they informed me I can’t do this unless Iv made a complaint , I made a compliant in March 2020 they are saying this doesn’t exist, can I still make a complaint now and can my guarantor too ? Thanks
Sara (Debt Camel) says
Your March 2020 complaint. Was this by email? Do you have a record of that?
You can complain (and should) now – send a very short email to hello@amigoloans.co.uk with COMPLAINT as the subject. Just say you want to make an affordability complaint about your Amigo loans.
That should sort out the equitable set off. But it’s also worth following up on the missing previous complaint as that may mean you may be able to get more money back if your complaint is upheld.
Sue says
Thanks Sara I have complaint again through a link they sent me so has my guarantor, I have a record of the complaint I sent to the with the date and time on it
Winnie says
Hello Sara – this is my first time posting, so please forgive me I sound a bit clueless.
I have some questions please: I have several historic debts (payday loans, old credit cards, overdrafts) where should I post about all of these and ask advice?
Regarding Amigo, I would like to do an affordability complaint, even though I paid off my loan. Bit of history – I took out £5000 in May 2012, and I paid it all back by February 2018. I looked at my statement and it seems like I paid back £13077.42 in total. Amigo did no adequate checks when I took my loan out, I was sinking with payday loans. They only asked verbally what my outgoings were and I told them about household outgoings, not any payday loan outgoings as they didn’t ask/check any statements etc for proof.
Should I just send a brief email, as you mention above, simply saying I’d like to make an affordability complaint? Does it make any difference that I paid it all off?
Thank you
Sara (Debt Camel) says
I have several historic debts (payday loans, old credit cards, overdrafts) where should I post about all of these and ask advice?
For affordability complaints? Different pages for each sort of debt:
– payday loans https://debtcamel.co.uk/payday-loan-refunds/
– credit cards https://debtcamel.co.uk/refunds-catalogue-credit-card/
– overdrafts https://debtcamel.co.uk/get-refund-overdraft/
Paying off a loan does not prove it was affordable. You can make a complaint now but it will be ignored. It isn’t clear if making a complaint now will automatically enter a claim into the proposed Amigo Scheme, or if you will still have to enter the claim anyway. You could decide to simply wait and claim in the Scheme. Or in Administration if Amigo fails to get a scheme approved.
Winnie says
Thanks for your reply, and all the links. I looked at the generically worded email Amigo sent me, and it said that a complaint can be made and, if evidence is available, to submit it. I decided to just send the email, but didn’t send any evidence as I need to collate it. Regards.
Helen says
Im guarantor on an amigo loan. My husband took the loan out and pressured me to be guarantor. Following abuse we have split and predictably he’s stopped his payments . I’ve emailed a complaint using your templates which they’ve acknowledged. I’ve just set up a payment plan of £50 per month, but from reading your replies above , can i cancel this
??? And no black marks will appear on my credit rating? Loan was about 3k, he paid less for ages so interest has rocketed and total o/s is about 6k. I’ve complained about affordability, being pressured, and being financially linked at the time too.
Sara (Debt Camel) says
As a guarantor, the Amigo loan does not appear on your credit record. The payment plan cannot hurt your credit record and nor can a default.
The only way this can harm your credit score is if Amigo goes to court and gets a CCJ. That is not going to happen at the moment – it is a long procedure – if you defend it cases take an average of a year to come to a court date! – and Amigo has not started any court proceedings where there is an aoutstanding complaint since it first proposed a scheme back in Dec 2020.
However if your claim is rejected in the Scheme 9or in administration if the Scheme fails to be approved) then you would have to start repaying or a CCJ may be a possibility.
Is the current £50 affordable? In the light of energy bills, petrol, broadband, mobile, national insurance, council tax etc all going up in April?
Sophie says
Hi Sara
I took out an amigo loan for £10k in 2017, I was shocked that I was accepted as I was young and had a low wage income, as did my guarantor. We managed repayments until we got made redundant and informed them straight away. They were so awful about it, and rang me multiple times a day demanding payments, in the end I had to get my mum to use her credit card to pay my arrears. Then they just kept asking for more, and then hit me with a CCJ one month later. I then entered a DMP which they rejected. I have not paid them a penny since. I complained about the irresponsible lending before the scheme started, I took it to FOS who said take it up with amigo, I tried to get a write off based on my bad health, no joy. They’ve received my complaint and vote in the scheme. I’ve said I want no compensation I just want the balance written off and the ccj erased which I know they can do. What are the chances of this actually working out? Am I better off just going insolvent? This has dragged on for 2 years and I really don’t know if I’ll get any worthwhile outcome.
Sara (Debt Camel) says
who was your guarantor?
Sophie says
My partner
Sara (Debt Camel) says
So your partner has a CCJ as well?
How large are your other debts? Your partner’s other debts?
Sophie says
Yes, both of us. I have around 7000 other debts as I took a bank loan to consolidate all the payday loans and credit cards I used to live on after the events. My partner only has around 4000.
Sara (Debt Camel) says
OK, so you are right this is all dragging on.
Do you know what you have paid to the loan so far? This is an important number for you in the decision about insolvency.
If you have repaid more than the 10k you borrowed, then winning your claim in the Scheme will wipe out your balance. In the first Scheme (that was rejected) Amigo said they did not intend to remove CCJs, even though they could. I suspect they will take the same approach in this new Scheme – they mainly seem concerend to save money and do as little work as possible, regardless of what is right for their customers.
If you have paid less than 10k, then you would still be left owing a balance even if you win your claim in the Scheme.
For you the insolvency decision depends on whether you can repay in a realistic number of years your 7k of other debts plus any balance you could be left with of the Amigo loan. And in thinking about this you need to take into account the way bills and prices are going up at the moment.
If the answer is “No” – then there is little point in waiting another 9-12 months to get the result of your claim in the Scheme. I suggest you talk to StepChange (or whoever else is running your DMP) about whether a Debt Relief Order now would not be a better option for you. (Unless you have assets to protect you should NOT consiver an IVA.)
If you go for a form of insolvency like a DRO now, that leaves your partner liable. You can still make a claim to the Scheme – if you win it they will be removed as guarantor. They can also make a complaint themself that the loan was not affordable for them – if they win that they will be removed as guarantor.
So one way forward for you now could be insolvency for you, wait and see if your partner is released as guarantor in the Scheme and if not they could opt for insolvency in a year’s time.
Or you could decide that it is better (simpler, less stressful, over quicker) for you both to look at insolvency at the moment. Again talking to your DMP firm is a practical way to think about these options. But if you would prefer to talk to a different debt advise, phone National Debtline on 0808 808 4000.
Bobby says
Hi Sara My friend is a guarantor for a loan ,he has had two complaints not accepted by Amigo .He has had no chance of taking it to the ombudsman as no more complaints were being dealt with .He has had his payments drastically reduced from £130 a month to £20 a month .He had a text message saying he might be able to make a claim from Amigo know .My question is will he be able to do so after the court case ? And will he be able to have access to the ombudsman?
Sara (Debt Camel) says
if the Scheme is approved, he can make a claim to the Scheme and it will be considered by Amigo.
If the Scheme is rejected, he can make a claim to the administrators as Amigo will go under.
In neither case will he be able to take his complaint to the ombudsman.
What are the rest of his finances like at the moment?
Bobby says
What do you think of his chances of being successful this time around ? Will Amigo be more sympathetic towards his claim? His finances are not very good as you can tell by his reduction in payment that was agreed with the Amigo loans collection company .
Sara (Debt Camel) says
What are the rest of his finances like? Does he have other problem debts? Is he buying or renting?
What were they like at the time the loan was taken out?
Bobby Jones says
Hi Sara he is renting and he is managing his own loans ok. .He had his his own loans at the time the amigo loan was taken out .He was in no position to be guarantor in my opinion at the time the loan was taken out .
Sara (Debt Camel) says
I can’t guess what decision Amigo will make in the Scheme. He may decide he would prefer administrators to make this decision and not Amigo – in which case he should vote against both Schemes (technically there will be two to vote on, another complication).
Ultimately if his claim is not upheld, this just becomes another loan that he has to pay and he should take debt advice – National Debtline on 0808 808 4000 are good.
The problem for him is that there is unlikely to be a decision on his claim in the Scheme much before the end of the year and it could well be next year.
So can he get through to that point paying the reduced amount? Energy prices, council tax, national insurance, broadband, mobiles all go up in April. Petrol and food prices are already rising.
If he can’t then he has two options. First is to stop paying Amigo anything until his claim is decided in the Scheme, which may remove this problem loan altogether.
But if he would struggle to pay his other debts, then talking to a debt adviser now about all of his debts is a good idea. He should not get behind with essential bills in order to try to pay Amigo and other non priority debts.
Stefan says
Hello Sara
I am really sad.
I take loan with Amigo 2 years ago. During phone call while my partner sitting next to me and listening to short term and condition from amigo representative I decided to borrow 8.000£ for 5 years. I understand that interest is roughly 50 % but I needed money so I go ahead with plan that I am gonna repay in shorter time.So I paid and paid and paid..after 20 months or so I went on line to check actually balance and I nearly get heart attack!! Only then I realized that my monthly payment of 316£ only about 20£ was going towards my actual debt.My partner and guarantor was crying as well like my self. I have no idea or been explained that it works this way.i would never believe this.i called Amigo 4 months ago he even said that total repayable amount will be roughly 19.000£ !! What ?? How ?? Why?? My outstanding balance now is roughly 6.100 !! Absolutely shocking. Basically every day I pay 10£ for their big profits.i need work one hour a day to pay that I need work 32 hrs only to pay their interest.this is shocking thinking on my small son needs new shoes or trousers etc and everything is so expensive.I mean who ever allowed to Amigo borrow money like that?? So I made complaint but reading now that theirs court hearing moved again just make me sick thinking I already basically paid back roughly 8.000£ only in about 28 months or so..and according to payment plan next 32 months times 316£ and fee’s on the top of it.This is just not right.
Sara (Debt Camel) says
Amigo’s high interest rates are killing. But let’s look at what your options are now. Sorry several questions:
Do you know exactly how much you have paid to this loan so far – the total of your payments, ignore whether Amigo says they are clearing interest or principal?
What is the rest of your current situation like at the moment? Do you have other problem debts? Are you behind with any important bills? Or are you about to get behind because of all the price rises?
Are you buying or renting?
What was your partner’s financial situation like at the time the loan was given? COuld they have afforded to pay all the 60 repayments iof £316 and still been able to pay their own debts, bills and living expenses?
Ruth says
Hi Sara,
Are there any updates from yesterday? I saw the FCA released a letter 2 days ago saying they weren’t going to oppose the scheme
Sara (Debt Camel) says
The FCA said they were not going to appear at the first court hearing that just approves the voting process – it reserved its rights to intervene later: https://www.fca.org.uk/publication/correspondence/amigo-loans-limited-proposed-scheme-of-arrangement.pdf.
The judge said he would give the judgment in the next few days and he was minded to approve the voting taking place. Some minor changes are being made to the Explanatory Statement.
Sandra says
Hi Sara amigo have emailed me
Today that I can apply for the set of that they are talking about what does this mean also I haven’t payed amigo for over a year and a halve as I’ve my complaint in over that length of time maybe more.
Sara (Debt Camel) says
This article explains what Equitable Set Off is: https://debtcamel.co.uk/stop-paying-amigo-set-off/. So far people have had to ask for it – it’s interesting that Amigo are at last telling people they can apply for it.
If Amigo have stopped pestering you and your guarantor, I am not sure what you will gain from it, but read the article.
Sandra says
Thanks for the quick reply Sara I haven’t payed in a long time and I definitely know I’ve payed more than I owe and my complaint is with them a very long time, if they haven’t been chasing me for payments I’m not sure to apply for the set of what is your opinion on this, thank you
Sara (Debt Camel) says
it’s main advantage is they stop pestering you and won’t ask your guarantor to pay. I suppose if you don’t apply they may start asking you to pay? I can’t see any harm in applying, but no benefit either.
Emma says
After reading this post a while ago I put in an affordability complaint to Amigo. As I have already paid more than the principle loan amount I asked for equitable set off which Amigo agreed to. I came home today after a long day at work to a letter from Amigo asking me to make a payment I missed on the 28th February (after the set off was confirmed) or they will seem the payment from my guarantor, who also got a letter today and is understandably annoyed and worried.
I am so angry and upset with Amigo, I thought the set off would stop them from pestering me, apart from statutory notices! I have complained to them about this tonight, but now I am filled with sorry that this pestering of my guarantor and myself will continue. I feel like crying.
Sara (Debt Camel) says
Yes a lot of people have got these letters today – not good. You have done the right thing to complain.
Shane says
Hi Sara,
I really appreciate all of your work collating and explaining this process, it has been invaluable.
I have a question about the trust fund. I have now paid back more than I borrowed and my partner said that she would be willing to pay off the balance from her savings and I can pay her back some time down the line as I am really struggling right now.
Balance is currently around 7.5k, if I was to settle this balance today and win my claim would I get that full 7.5k back from the trust? Or would it be still only pennies in the pound?
I have had a complaint with them since forever it seems, I believe I have a good case. It’s just really frustrating that this has dragged on for years and it has been impossible to try and get anything else in order while waiting for their decision.
Many thanks
Sara (Debt Camel) says
if I was to settle this balance today and win my claim would I get that full 7.5k back from the trust?
That is what is supposed to happen.
If that sounds doubtful, it is because there is no experience to go on here, it is a new thing Amigo has invented.