A partial refund on some of my guarantor loans – what should I do?

In the last few weeks, several readers have been offered a “partial uphold” by Amigo. Here are some examples:

Amigo only accepted my complaint about the first and final loans which were both relatively short.

[Amigo] have upheld loans 2, 5 and 6.

I have had around 6 with [Amigo] including top ups they have rejected the ones I paid off previous to the loan outstanding now

This isn’t happening to everyone. Some people are getting a full refund.

These offers sound pretty odd – how likely is it that the first and last loans were unaffordable but the ones in between weren’t? And anyone who had six loans probably has a very good case to get most of them refunded!

So what are your options if you are offered a partial refund?

If you are thinking that any refund from Amigo would be great and wondering how you can get one, read How the borrower of a guarantor loan can complain.

It’s good news if your current loan has been upheld

In most cases, the last loan is one of the ones that is refunded.

If you still owe money on this loan, this Amigo refund is great news for three reasons:

1. interest is removed from the loan, so you now owe a lot less.
2. your guarantor should be released from the loan.
3. you can now set up a more affordable payment arrangement for the remaining balance.

Often Amigo releases your guarantor automatically, but if they haven’t done this, tell them you want your guarantor released.

Amigo doesn’t ask if you would like lower payments, but you can insist.  You can also include the loan it in a debt management plan, knowing your guarantor can no longer be affected.

But could you do better?

Your first thought may be huge relief that the last loan is now more manageable and your guarantor is now safe.

But if more of your previous loans were refunded, that would mean your remaining balance went down further. You might get a refund if you paid a lot of interest on the earlier loans.

So this is well worth looking into. See on reader’s comment below:

I complained to Amigo and, after sending bank statements, they agreed to refund loans 4-8 out of 8.
I went to FOS and a few weeks ago Amigo decided to revise their offer and refund interest on ALL of the loans.
Definitely worth going to FOS – I’ve gone from 15k debt down to 1k just from Amigo.

You can send your complaint to the Finacial Ombudsman (FOS). This is easy to do. Their online form prompts you for everything FOS need to know to start your case. You can just copy out what you said to Amigo originally about the loans being unaffordable, then say what Amigo have offered and say you think the other loans were unaffordable too.

You can add more details if you want. The CD from Amigo with your information could help with this.

But it’s fine to keep these complaints simple and the start. If your adjudicator – the person at FOS who looks at your complaint, also called an investigator – wants more details, they will ask for them.

Some questions you may have

Can Amigo withdraw their offer if I send the complaint to FOS?

No! They can’t go back on that decision! It wouldn’t be fair on you, or your guarantor, if Amigo were to change their mind.

So far no-one has had this problem.

Might FOS offer me less than Amigo have?

What a FOS adjudicator usually does when someone says “I was offered a refund on loans 4 and 5 but I think I should have a refund on the earlier loans” is start by saying “Both sides agreed 4 and 5 should be refunded so I will just look at loans 1-3 where there is a dispute”.

In theory an adjudicator doesn’t have to do this.

But in thousands of affordability complaint, I don’t remember one where a borrower had an offer to refund ceratin loans and FOS then decided that the refund should be smaller. The only time I have seen someone get less is when the lender’s offer was a small, goodwill offer of £25 or £50. If you reject that and go to FOS, who agrees with the lender that your loans were affordable, you won’t get that token offer.

Perhaps a loan that was repaid was affordable?

It may have been. But just paying a loan doesn’t make it affordable.

You may have got into difficulty with other debts and bills trying to repay Amigo. Or you may have needed that top-up or you couldn’t have afforded to clear the earlier loan.

Many people have had a full refund of all the loans from Amigo, even the ones that were repaid.

The loans not refunded were quite small and I didn’t pay much interest

If you think the offer is fair, there is no need to take it any further. You have a great result already!

But if you know the loans not refunded caused you a lot of stress and hardship, and may have meant that you ended up borrowing more from Amigo, then the loans were probably unaffordable.

I was going to go bankrupt anyway

With a lot of other unmanageable debt, then getting your guarantor released from the current loan may have been your main aim, not the refund itself. Now you can go bankrupt or have a Debt Relief Order.

If getting a refund on the earlier loans would let you pay off a lot of other debt it might be worth pursuing. But if it wouldn’t make enough of a difference then get some debt advice on your options and if that says a DRO or bankruptcy go for it!

There is no point in taking a case to FOS if you are about to go bankrupt or have a DRO. See guarantor loans in DRO / IVA / bankruptcy  for details.

How long will it take?

I don’t know. The backlog of FOS cases early in 2019 has mostly gone so new cases should go through quicker. With an affordable payment arrangement for the current loan in place you won’t be under any financial pressure. So does it matter how long it takes?

How to decide what to do

If Amigo has only refunded some loans, think if that is fair.

If it doesn’t feel fair to you because the loans caused you a lot of problems, it’s easy to send a complaint about the unrefunded loans to FOS and you can’t be worse off by doing this.

The three examples I mentioned at the top of this article all sound like good cases to send to the Ombudsman to me!

If you aren’t sure about how much extra you could get from a refund on the other loans, post a comment with some details about your loans and how much you have paid to them over on the main guarantor loan refund page. Getting real numbers can help you decide what to do.

This applies to all guarantor lenders, not just Amigo. But all the “partial uphold” cases I have seen so far are Amigo complaints.

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