This article relates to Amigo’s first Scheme, which was rejected in May 2021.
See Amigo’s second Scheme for articles on the second Scheme.
When Amigo announced it was seeking a Scheme of Arrangement on 21 December 2020, I said there were very few details and asked some questions.
On 25 January more information about the Scheme was given. But there weren’t any of the useful numbers I had been hoping for, so I have not made any changes to the rest of this article.
This article looks at some possible numbers to see how this Scheme might pan out if the Financial Conduct Authority (FCA) allows it to proceed. (UPDATE the FCA objected and the Scheme was thrown out at the second court hearing in May 2021.)
I am interested in:
- how Amigo can assess claims in line with Financial Ombudsman decisions
- what refunds customers might get
- whether there is enough money in the Scheme to make it workable, and
- whether it is equitable for all Amigo’s stakeholders
I have had to make a lot of estimates and guesses to be able to do any calculations. Some of the numbers and estimates are in Footnote 1 at the bottom of this article.
Contents
How much money is going into the Scheme pot?
Amigo said:
The Company anticipates the immediate cash payment under the Scheme towards the Redress Claims Pool will be £15 million, with the option for this to increase should the anticipated Balance Adjustments be less than expected, up to an extra £20 million of cash. In addition, the Company will make a cash contribution to the Scheme based on 5% of profit for the next three financial years ending 31 March 2024. In light of the cash contribution to the Scheme and the Balance Adjustments to the loan book, the Company believes the requirement for the current unutilised complaints provisions remains in line with expectation.
The previous provision for complaints was £159m in the half-year accounts. Some of that will already have been used for complaint settlements and expenses. A significant amount will be needed for the cost of setting up and running the Scheme. Let’s say there may be £120m available from the Complaints Provision for the Scheme.
I am not clear why Amigo is apparently distinguishing the money in the provision from the new money available to the redress claims pool. If it wants to put all customers into the same “class” to vote on the Scheme, I think there has to be a single pot available to that class. If the balance adjustments come to a lot less, then why doesn’t all that extra go to the pool for cash refunds? If the balance adjustments come to more, then surely they have to take priority and there may be no money left for any other refunds.
How will claims be assessed – details are needed
In payday loan administrations, the administrators have faced this problem. Their approach is to develop an automated process where the decisions would be broadly in line with what FOS would decide and have a similar uphold rate.
Amigo needs to do the same here. It has not given any details as to how it would do this. FOS has been upholding over 80% of Amigo cases.
This matters because the FCA needs to be sure that this Scheme isn’t an attempt by Amigo to uphold fewer complaints than FOS would. No authorised firms should be able to think they can undermine FOS decision-making by setting up a Scheme.
Amigo’s own records don’t have verified income and expenses, which is what FOS works from. But it seems to me that Amigo could make a reasonable attempt to uphold cases in line with FOS by accepting any complaints with one or more of the following characteristics:
- customer appears to be in a debt management plan or has multiple payment arrangements;
- recent significant CCJ/defaults/payday loans;
- essential items missed from expenses or have amounts which are unfeasibly low;
- customer was assessed at an implausibly high disposable income;
- has applied for a top-up but finances had got worse;
- customer was relying on partner to pay essential bills but this was never checked;
- any payments by the guarantor;
- no verification of self-employed income.
What Amigo can’t do is reject a complaint because it was the first loan, because all payments were made on time or because it considers the income and expenses on the loan application were incorrect. FOS is routinely upholding guarantor loan complaints in all these situations.
Amigo also needs to explain how some cases will be handled:
- will the Scheme make a deduction for “unpaid interest” when not all loans are upheld? FOS does not do this. (UPDATE Amigo has said it will carry on making this deduction).
- what will happen if a borrower’s complaint is upheld and the guarantor has made payments? (UPDATE the guarantor will be refunded, paid at the low Scheme rate eg 10% or less)
- how will complaints about loans sold to a debt collector be handled? (UPDATE these will be bought back and resolved)
- will CCJs and charging orders be removed? (UPDATE Amigo has said CCJs will not be removed.)
- what about complaints where a guarantor complains that the loan is unaffordable for the borrower – will these be assessed on what is known about the borrower? (UPDATE – probably but still not very clear.)
- what about complaints where the customer, typically the guarantor, says they were coerced, pressured or conned into agreeing to the loan. Will these be considered by the Scheme? (UPDATE the answer is Yes.)
Customers with a current balance
The right of set-off
The Scheme announcement said:
there would be an automatic right of set-off for the redress due to claimants against their current outstanding loan balance.
A simple example shows how this treats a borrower very differently depending on how much has been repaid. Take a £4000 loan for three years, monthly payments £195. The interest would be £3,020 which is the basic redress if the loan is decided to be unaffordable:
- after a year, the borrower has paid £2340 and owes £4680. The redress is used to reduce the amount owed to £1660. So the borrower “has 100%” of the £3,020 redress through a balance write-down.
- after two years, the borrower has paid £4680 and owes £2340. The redress clears the balance, so the borrowed has 100% of £2340 and then only gets the standard pence in the pound payout for £680. The pence in the pound payout may be very low, see below.
- after three years, the loan is just paid off, the borrower has paid £7020, owes nothing. The borrower gets only the standard pence in the pound payout for £3,020.
Of the 150,000 people with a current loan, roughly one-third of the ones who only had one loan and who hadn’t taken a Covid-19 payment break would still owe a balance and two-thirds wouldn’t after redress. That is a big simplification with a lot of assumptions. See Footnote 2 if you are interested in these.
(Clarification: someone asked in the comments below whether many more customers would not have paid off a lot as the Scheme will take a year or more to give the balance write-off? I think the answer is No, because in the Money Shop Scheme, current debtors who have a complaint upheld get a full rebate of the money they have paid in since the Scheme started. So dragging out the Scheme will not reduce the cost of balance reductions.)
These differences are important for borrowers. They are also key to the cost of the Scheme for Amigo. Balance write-offs have to be covered in full.
This right of set-off would also apply in administration, so the customers who appear to get a generous write off are not actually benefiting more from the Scheme than they would if Amigo goes under.
How many are likely to make a claim?
This is a big unknown.
One group won’t be claiming – those who have already had a complaint upheld. But they are probably a small amount of the loan book as their balances will already have been reduced.
Of the rest, past experience with payday lenders isn’t much help because Amigo’s loan book and customer details are very different:
- Amigo loans are large. Quite a few payday loan customers only took one or two small loans and repaid them without problems so they would never claim.
- Over a third of Amigo’s current borrowers have probably had some financial difficulty this year as they applied for a Covid-19 payment break. The fact their loans are now being repaid doesn’t mean their financial problems are solved, just that they are desperate to protect their guarantor.
- If the borrower misses the email or doesn’t think it applies to them, the guarantor will also be getting an email so may encourage the borrower to claim.
- Unlike payday lenders, Amigo isn’t carrying a large number of old, defaulted loans with many inaccurate customer contact details.
I find it hard to imagine fewer than half the current customers would claim and it could well be three-quarters. Perhaps 100,000 claims?
What would this cost Amigo in balance write-offs?
Assume an uphold rate of 80% (see above) so 80,000 claims upheld out of the guessed number of 100,000.
Average loan book value of £3400. It would be better to have the average redress value for the upheld claims but that’s complicated. Let’s assume the average redress for these customers is the same as the average loan book value – this simplification is in Amigo’s favour.
My theoretical calculations above suggested one-third of people with a single loan would get their balance reduced by the whole amount of the redress on that loan.
I shall assume that of the remaining upheld complaints, a half get a write off of two-thirds of the amount and a half get a write off of one-third of the amount.
On those assumptions I make the total write off about £180m. That is more than Amigo is proposing to put into the Scheme.
I don’t know what Amigo is contemplating doing in this situation… if it covers the write-offs in full, would it still be solvent? If it is proposing to restrict the balance adjustments, then these customers would get less than they would in administration which cannot be acceptable.
Amigo seems to be thinking the total balance write off would be less than the provision – so £120m.
The only way I can get the total write off down to that is EITHER to use low complaint numbers OR an uphold rate that is much lower than the Ombudsman’s.
Customers whose loans were settled
- 500,000 previous borrowers;
- 50,000 previous guarantors who had made a payment;
- average redress £5000;
- assume claim uphold rate of 80%.
Again the big question is what the complaint rate will be.
The complaint rate will be lower than for current loans because Amigo is far more likely to have out-of-date contact details and some emails sent to the correct address will get put into spam.
But it won’t be that low. No-one forgets having had an Amigo loan. The guarantor may suggest that the borrower should claim. Few people will think of an Amigo loan as something small and unimportant. The FCA’s recent survey on relending found a high level of borrower regret for top-up loans.
Let’s say 20% of borrowers complain and ignore the guarantors. Let’s ignore the people with a small balance reduction who are owed more redress.
That gives 100,000 complaints, 80,000 of which are upheld at an average redress of £5,000. A total redress bill of £400m.
If the pot to be divided is only £15m (it could be less, even zero. Any more seems unlikely.) plus £10m more from the 5% of profit in the next three years provision (that feels very optimistic given previous profit amounts) that is £25m.
That would give a payout of 6p in the £ over a period of 4 years.
These feel very conservative estimates for complaint numbers, they could easily be higher. So I think 6p is maximum, unless Amigo has a lower uphold rate. In reality it could well be 2-3p in the £.
Treating customers equitably
In its announcement, Amigo said:
A key objective is that all customers are treated equitably.
It seems to me that there are three parts to this.
First, are the complaints being upheld in a fair manner? Customers need to be able to make a reasonable guess as to whether their complaint would be upheld in the same way it would at the Ombudsman. Given Amigo’s very poor complaint handling this year, many borrowers will have no faith in Amigo saying what it is proposing is fair and equitable without a lot of details before they are asked to vote.
( UPDATE see Amigo – what is happening with “Scheme 2.0”? which looks at the issue of whether Amigo is planning on upholding only 40% of complaints – less than half the number FOS has been upholding.)
Secondly, is the division of the money between the customers fair? I think customers would understand that people with a balance will do better. But I am not sure they will accept that people who have repaid the loans should only get a few pennies in the pound where people with balances get a full write off, even though that is what happens in insolvency. I repeat what I said before – these groups of customers are in such different positions that they should be treated as two separate classes in a Scheme.
Thirdly, are customers being treated fairly compared to other stakeholders?
Looking at this Reuters article, two weeks ago the Amigo bonds were on a yield of over 27% – other bad credit lenders such as Provident and NSF had bonds trading at 9-11%. That suggests that the bondholders do not expect they will get all their money back if Amigo goes into administration. So why are they not being asked to share in the pain now, with a debt for equity swap ,for at least part of their holdings?
Shareholders would of course lose the entire value of their holdings in administration. Instead of this, the Scheme will give them the benefit of 95% of the profits over the next three years. That feels fundamentally unfair to me. I would suggest that customers should get 50% of the profits each year until they have received at least 50p in the £, and during this time there should be no dividends paid.
Conclusion
When I looked at the Money Shop’s proposed Scheme last year, the important numbers turned out to be how many people would complain and what the uphold rate would be. The same applies here.
I needed a lot of other numbers to make estimates of what refunds customers could get under the Amigo Scheme. I had to use estimates and assumptions. Amigo probably knows many of the actual numbers – I hope they have shared them with the FCA.
On my calculations, it looks as though Amigo may not be putting enough money to allow people with a current loan to have full set-off. And people with settled loans would be getting 6p or less in the £.
Meanwhile the bondholders are not being asked to take any losses at all and shareholders get away with only a tiny impact on future profits.
I can’t see how this can be an acceptable proposal for the FCA.
Footnotes
1 – some numbers and their sources
- Amigo has 150,000 customers with a current loan, and 500,000 past borrowers (from this BBC article.)
- customer numbers were rising until lockdown: 222k in 2019/20; 201k in 2018/19; 169k in 2017/18. (from 2019/20 Report & Accounts.)
- average redress amount – estimate £5000. (Average redress won’t swing wildly so 10% would be typical for sensitivity analysis. The 2019/20 Report & Accounts used +/- £500, implying £5000 average.)
- 28% of loans were relending in 2019/20, down from 39% in 2018/19. (from 2019/20 Report & Accounts.)
- statutory profit/loss: -27m in 2019/20; 88m in 2018/19; 50m in 2017/18. (from 2019/20 Report & Accounts.)
- 513m estimate of gross loan book at end 2020 (from half-year accounts – gross loan book 558m at end September 2020 and loan repayments had been 91m in six months).
- average balance owed to Amigo is estimated at £3400 (gross loan book divided by the number of current customers).
- 57,000 Amigo customers took a Covid-19 payment break, ie more than one in three. (from half-year accounts).
- Amigo had 275 CCJs in Northern Ireland in 2018. That suggests there may be tens of thousands of CCJs across the whole book. (Registry Trust statistics)
- Amigo often says that less than 10% of guarantors are making a payment. I am unclear if this is less than 10% of guarantors ever make a payment? Or a snapshot at a point in time. (UPDATE Amigo has later confirmed that 30% of guarantors have made 1 or more payments)
2 – assumptions in working out balance write off
- the open loans are evenly spread over the 4 years before the first lockdown. Weighting the loans to be more recent as Amigo’s business has been increasing means more people are likely to owe a balance after redress.
- all the loans are over one year old – ignores the low number of loans post lockdown;
- taking a Covid-19 payment break means people are more likely to still owe a balance after redress as they have paid off less;
- having had previous loans means people are likely to get more redress so they are less likely to still owe a balance after redress. )
3 – it’s complicated to work out average redress for loans with balances
Across all complaints, the average redress value was estimated at £5000. (UPDATE Amigo has confirmed that £5,000 is a reasonable figure for the average redress). But that may not be right for people with an open loan who have made a complaint:
- complaints about older loans that have been settled several years will tend to get a higher amount so the average redress for people with an open loan will be slightly lower;
- only people with a higher than average balance could get a balance write-off of £4000 – needs the distribution to be modelled.
- the average balance is reduced artificially by including customers who have already won their complaint;
- it seems likely that people with a larger debt are more likely to complain.
Gord says
Week if it’s anything like the money shop scheme it’s a disgrace I received a letter saying they agree with my irresponsible lending complaint and they are only paying 4% total disgrace was told that if we agreed to scheme it would be more money I think I’ve to get £43 next year
Andrew says
Hi Sara,
I currently have a complaint that is with the FO and has been since June. The FO came back to me with an offer from Amigo on the 7th December that was identical to the one they had offered me directly and the FO advised me that it wasn’t inline with what they thought it should be so I rejected it and currently awaiting the second offer.
With regards to this scheme, would this affect my complaint I.E could my complaint be moved into the scheme should it be approved by the FCA or os it just for new complaints?
Thanks
Sara (Debt Camel) says
The Amigo announcement says: “Amigo will stop the ongoing payment of all Redress Claims, except for those cases where the Redress Claims result from: (i) reviewed and upheld complaints where a Final Response Letter has been issued to the customer, dated before 21 December 2020”
I don’t know if the offer you recieved from Amigo is a “Final Response Letter”
Rob says
Will existing claims with FOS for unpaid interest and for loans that did not get uphold be unaffected? or will this scheme apply to all new and existing complaints in the process.
Thanks
Sara (Debt Camel) says
That is one of many things that Amigo needs to explain. There is hardly any details in the announcment.
Steven says
I borrowed £5000 and they said only £7500 would have to be paid back. A couple of years into then loan an unexpected financial problem came in, I then asked for £10,000 which some came off the other loan. Now I never was asked to take a covid 19 break but reduced my payment down to around £295. At the end of my 5yrs I will have paid £23,000 which I was never told of the amount to repay. This would never have been taken out if known. I have paid at least £8000 back.
Sara (Debt Camel) says
Have you sent in a complaint?
P says
If Amigo take a year or more to payout in the Scheme, then people will have repaid a lot more and the write offs will be a lot lower. Unless people can have a payment break while their complaint is waiting?
Sara (Debt Camel) says
Good point.
What seems to happen in administrations and what the Money Shop is doing is that if a Claim is upheld, then people are refunded any payments they have made since the claim was submitted (or possibly since the start of the Scheme, I’m not sure)
Amigo needs to do this to.
Gord says
Money shop upheld my complaint my balance writeoff and redress is 890 but I’ve only to get 4 %
Patrick says
It looks like Amigo’s priority is to delay paying out for as long as possible because the longer it takes to settle existing complaints, the more money they collect in the meantime.
This new “arrangement” (can I call it a scam?) will draw the process out yet further, with the genius idea being to only repay customers a tiny amount back, because more and more balances will already be settled.
How can they say a “key objective is to treat customers equitably”, when some cases received full compensation in 2020, while older complaints with equal merit might only get a tiny % back in 2021?
Do they really expect the Ombudsman to fall for this?
Sara (Debt Camel) says
the Ombudsman doesn’t get asked to approve this – the FCA does.
Omar says
Note: I am a current investor in Amigo Holdings.
Hello Sara, great read. I have read all your pieces to do with Amigo and the current state that it is in.
I have gone through the numbers myself before you have posted this to inform customers who are experiencing redress due to Amigo’s Actions. I sympathise with these customers and hope we all see a way out of this. The initial problem here was that Amigo was not doing the necessary affordability checks to potential customers and eventually giving them a loan that they (in the eyes of the FCA & FOS) couldn’t afford. It has gotten to the point where there are too many claims for Amigo to survive. I am not disputing that these are legitimate claims.
The best way to serve these customers are to pay them what they are owed. This is what has been happening during the course of 2020 and as of 30 September 2020 £93.7 million has been given out leaving £65.4 million in the redress pot. There is no proof that these claims are slowing down, and unfortunately Amigo does not have enough money to address all of these claims. This is just a fact. Amigo has a duty of care to all stakeholders in the business from customer to employee to investor.
Sara (Debt Camel) says
Hi Omar, thanks for taking the time to set out your thoughts. This is a better medium for reasoned discussion than Twitter where some other investors seem to think being offensive to me or to customers making claims helps their argument…
I too assume claims are not slowing down because Amigo is refusing to publish numbers. It surprises me that any investors are prepared to put up with this! The new Board doesn’t seem to be much more transparent than the old one was.
I’ll accept that there are a lot of stakeholders and ignore your phrase “duty of care”.
Omar says
[2]
The fact that this is a business, its sole purpose is to make a profit, it isn’t doing this at the moment, but taking massive hits due to these redress claims. The logical thing to do as a business is to limit this loss and try and try to recover from this devastating ordeal. From the calculations provided, you say the average redress claim is approximately £5,000 and there are 150,000 current customers with 500,000 previous customers and an FOS acceptance rate of around 80%. If everyone made a claim the amount Amigo would owe would be a staggering £2.6 billion. Sorry to be the bearer of bad news but Amigo only has around £134.4 million left in cash and about £485 million in the loan book, which would be sold pennies to the pound if it were sold. How on earth would it be able to pay back £2.6 billion. Let alone if it did, the first 25% of customers would be paid, the rest would go home empty handed.
Now Amigo understand this, and again, unfortunately Amigo is not a charity. If it’s going to lose all of its cash due to redress claims it might as well go into administration now, and again, sorry to be the bearer of bad news, redress customers would not receive a penny because of the other commitments to bondholders. In this circumstance, over 450 people would lose their jobs, investors would lose all their money, redress customers would get nothing, and the truth is, it’s a bad situation for everyone.
Sara (Debt Camel) says
“If everyone made a claim”
That isn’t going to happen.
Even when administrators write to customers and say “we have assessed your redress at £x – please complete this simple claim form” they do not get anywhere near 100% of previous customers doing it.
“you will not receive the amount you are entitled too”
Except that the only customers being offered reasonable redress under this Scheme are those with a current loan, who get 100% through balance write-offs. Which is exactly what they would get in administration.
Omar says
[3]
The only other logical solution was a potential Scheme of Arrangements. This would use the £65.4 million remaining in the pot and the additional £35 million they would add to the pot and 5% profits for the next three years. For now I will ignore the 5% profits each year and focus on the pot of £100.4 million give or take. Using the 650,000 customers and acceptance rate of 80% that is 520,000 minus the 25,000 already paid will give us 495,000 customers remaining with potential redress divided by the amounts owed will give us about 4p to the £.
I agree with you, 4p to the £ is a worst case scenario and I believe this would be a lot better, I would estimate it to be around 4-10p to the £. I know what you are thinking, it’s a ridiculous amount. I agree it is, the redress customers deserve 100p to the £ but unfortunately money does not grow on trees. The other only alternative is administration and no one receives a penny, with people losing their jobs, redress customers not receiving anything, bond holders don’t even get their moneys worth, investors lose their money. Too many financial implications.
Sara (Debt Camel) says
The Board is hinting at some other options. I don’t know what they are.
But a Scheme could be constructed in many different ways – this is not the only alternative.
Your simple calculations arrive at a not dissimilar number to my much more complicated ones. But let me point out the problem with your approach…
You have not taken on board that existing customers will get a full reduction in their balance owed for any redress. That is 100%, not some small number of pence in the £. You have to treat these groups of customers separately.
If all current customers make a complaint there isn’t the faintest chance of any money being available for the past customers. On my calculation of only 2/3 complaining, there isn’t enough money in the Scheme to wrote off their balances and there would certainly be no “extra £20m” to go to the redress pool for settled loans.
“The other only alternative is administration and no one receives a penny”
Except the customers with current loans who will also get a 100% balance reduction for a redress complaint.
“bond holders don’t even get their moneys worth”
That I agree with. The bonds are not priced for being repaid in full in insolvency. So why is Amigo not proposing that the bondholders should take some part of the pain in the Scheme? Why is it only the customers? A more normal Scheme proposal would involve the bondholders accepting that some proportion of their holding is swapped for equity. In my view there is no equitable Scheme that allows the bondholders to remain whole.
Shareholders are of course at the very bottom of the pecking order in insolvency and here would get nothing. That is the risk you take when you hold shares at 10p. You may get nothing but you hope to get 30-50-100p at some point in the future. That’s the nature of equities.
Gord says
We were also told this pack of lies from money shop vote for the scheme and you will get more money and guess what we are getting the worst scenario 4%
Sara (Debt Camel) says
I do wonder if the Board has considered the bad effect on the Amigo brand of this Scheme. It’s going to be pretty hard to present yourself as a cuddly helpful lender who likes to say Yes to people with bad credit when there are a hundred thousand previous customers outraged at what they are being paid.
The Money Shop Scheme attracts very little coverage now as it is seen as ancient history. With Amigo advertising for new customers and trying to get new capital for lending, the Scheme will be in the public eye for a couple of years or more.
Omar says
[4]
I have to add this next segment in, it is not like anyone put a gun to their heads for them to get a loan. You know, you don’t see gamblers betting even though they could prove they couldn’t afford it getting a refund back for a lost bet. But anyway, that is my bias talking and I sympathise with redress customers and sorry to be the bearer of bad news, you will not receive the amount you are entitled too, and that is just fact.
Look forward to your response.
Sara (Debt Camel) says
“a gun to their heads”
There certainly are guarantors who were coerced into becoming guarantors, with police and medical reports to back this up. And there are more who have suffered financial abuse. It is unfortunate that Amigo tends to say it had no idea and reject these sort of complaints. It is an indication of just how unpleasant this company can be to deal with that they do not immediately write off this sort of debt, which would cost them little as these cases are thankfully rare.
But most people taking a guarantor loan are not con men, they are desperate people who have convinced themselves that this loan is affordable for them – sometimes in defiance of all previous experience. And when it leads to more problems, they are then stuck with repaying an unaffordable loan without any of the usual debt solutions being available as they want to protect their guarantor.
These loans are loathed by debt advisers because of the appalling pressure our clients are put under by them. Any debt adviser would prefer to see a client with payday loans or home credit, the interest rate doesn’t matter. So please don’t kid yourself these are reasonably priced loans that serve a vulnerable group well.
For what it’s worth, I think gambling firms should also have a duty to either check on affordability or to cap maximum losses. I hope the government’s current gambling review will bring this in.
Let me end by pointing out what you haven’t mentioned, which is what the FCA needs to consider about the wider market.
Is this not effectively allowing a legitimised form of phoenixing – letting directors wash their hand of previous problems and carry on in business?
If this scheme goes through, won’t all other guarantor lenders want one? And payday lenders? And home credit lenders? And other bad credit lenders, from credit cards to logbook loans, not just simple loans?
The FCA has refused to approve Schemes from payday lenders – what makes Amigo any different?
Zoe says
Hi Sara,
Do you have any information on how to complaint about Amigo breaching GDPR regulations? I cannot find a dpo@amigoloans.co.uk email, which I’m almost certain they should have by law.
Long story short they have removed me as guarantor on 20/11/20 and sent redress payment on 17/12/20, however today 02/01/21 they have taken a payment out of my account which my bank has confirmed is a ‘card check’ payment. As I believe they have breached data protection in this instance, as I am no longer liable and have requested for all my details including card information to be removed. They have still attempted a payment without my permission. Any help would be appreciated. Sorry if this is the incorrect post to request help on.
Sara (Debt Camel) says
I think data protection is a complicated red herring here.
You can simply claim the payment back from your bank under the direct debit rules. Then cancel that DD so it can’t happen again!
Zoe says
Hi Sara,
This was not taken by direct debit as there was never a direct debit set up.
They have used my details and purposefully tried to take payment, I’m sure it will be refunded but it’s not the point. They haven’t had my permission to do this as there isn’t a direct debit that I can cancel
Sara (Debt Camel) says
Oh!
You need to phone your bank and ask how the money was taken. So far as I know the alternatives are a DD and a CPA. Insist you never agreed to either.
Don’t get side tracked using the term dara protection, the serious problem is money was taken without your permission.
Zoe says
Thanks for the help,
I will contact my bank and find out how it was taken but I believe it may be CPA as I was the guarantor and there was no DD set up.
Yes; agreed the main problem is that they took money without my permission and was this just a test to see if they could take a further higher amount down the line?
I thought initially it may be to do with GDPR as I requested all of my information to be removed from their possession, including my bank details as I didn’t want these to be stored on their system as I no longer have a relationship with them, only the borrower of the loan as there was a large amount remaining on the loan.
Sara (Debt Camel) says
if it is a CPA, tell the bank you never authorised it and you want it cancelled.
Vicki says
Reading all of this – the frustration for me is that I have had a claim going through the FO for over 2 years nows. They agree I am owed money back but Amigo have been fighting not to pay me. I am due approx £4K and can see I will get no where near that. Exactly the same happened to me with Wonga. I think it is disgusting that they can all get away with this and not have to answer for what they’ve done!!!
Zoe says
Hi Vicki,
My case took approximately 6-8 months. Keep at it. If the FO believe there is a case for you to have your complaint upheld then it will happen! Amigo declined to uphold my case at the beginning but FO came back and said they have now upheld it.
You will receive all of the money that you are owed for sure. Do you have an advisor that you can contact at the FO? I would ask them for an update on the situation and also email Amigo to remind them of your case as sometimes I believe they can be overlooked and others put in higher priority.
The longer they take to refund the money, the more interest you are accruing, so it’s usually in their best interest to settle the complaint.
Siobhan says
My case has been ongoing since April 2019. FOS have upheld, Amigo are fighting it.
Sorry but I do not think we will get a
Full refund, or anything near it with this scheme.
I’ve got two complaints in, one for the loan and one for sending me loan details for someone else complete with their banking and personal details. Amigo are answering one out of twenty emails I send.
I am disgusted with the way they are handling complaints and the mental health issues they are causing.
Alec says
My case has been with FOS now for 3 months not heard anything don’t have an adjudicator is there email address for amigo to get updates ibhave email FOS so waiting for them to reply.
Sean says
Will complaints where offers were not made within the 16wk time frame, have any chance of being upheld? They purposely stalled my claim, when an offer should have been made….then stated they’d entered this scheme proposal. Surely claims they didn’t not address within the timescale should still be paid out?
Sara (Debt Camel) says
I think you and a lot of other people have been treated very badly by Amigo deliberately delaying making decisions.
Can I ask if you still owe them any money?
Sean says
I do £1700, but I have been with them for 13yrs…started with a 1000 loan topped up to, 3000, then 7500…I accept I took it out but I was in a real financial mess. Even with missed payments, letters asking for help, my guarantor making payments..(these have be paid back by myself) they wouldn’t listen to me when asking for help, just bombarded both of us with messages and took money from their account. But always gave a top up. To be fair at that time, no one would have given me a loan!
I calculated I should get a substantial claim…on the day my time was up they asked for some questionnaire to be filled out, but it seems it was just a stalling tactic. I went through a company to do it all for me, and they stated from there experience. If I was being asked to fill this form out, amigo were going to make their first offer. Then it went quiet and this happened. Surely anyone purposely delayed would or should be paid out? I can’t see how they can do this, and try and carry on as normal by trading again!
Sara (Debt Camel) says
So the position at the moment is that if the Scheme goes ahead or if they go into Administration, from that point on, any payments you make will be refunded in full if your complaint is upheld. But that could be many months away and every payment you make until then will just mean that there is a lower balance to be wiped and you will get a refund at a pathetically small percentage.
Are you on good terms with your guarantor? Do you think you could explain that you have a strong complaint but you need to stop paying now, in which case they will get some hassle and should also cancel their direct debit to Amigo?
Sean says
So basically I’ll get the outstanding balance wiped out and that’s it, no additional redress? How can this scheme be approved and allow them to carry on, they hound customers for money but won’t pay out what’s owed.
At the moment they keep rolling breathing space due to furlough.
I feel it’s very unfair, for them to be allowed to get away with dragging claims out, and not sticking to the guidelines set out.
Sara (Debt Camel) says
I agree.
Sean says
Pence in the pound is also a farce, as you end up with an insult to injury.
How likely is the FCA going to agree this? And if not is administration really what they are looking to do, seeing as they want to continue the business.
And what is the alternative, if they aren’t approved and don’t go in to administration?
Sara (Debt Camel) says
How likely is the FCA going to agree this?
I don’t think the FCA should agree, but I can’t say how likely it is. The FCA has not agreed to some payday lender Scheme proposals in the past.
And what is the alternative, if they aren’t approved and don’t go in to administration?
I don’t know.
Bill says
i really do not understand what this is all about
Sara (Debt Camel) says
Have you had a text/email from Amigo?
Do you have a current loan from them or a previous one?
Were you the borrower or the guarantor?
Jen says
Hi sara,
i had an amigo loan taken out for approx 4500£ in 2015, i was making payments (but struggling out of fear of my mum, guarantor, having to pay) and lost my job, still owing them 1300£. Around 800£ is still owed currently.
I put a claim in about 9 months ago which they did not respond to in time and it was sent to the FOS by my claim company a few months ago, if my claim is approved by the FOS will i get a full refund of all interest paid and my debt wiped off? or will i only get what i owe them, wiped off?
thanks
Sara (Debt Camel) says
It isn’t certain if the Scheme Amigo is proposing will go ahead, we won’t know for months.
But if it goes ahead unchanged, then FOS will return your complaint to Amigo to put into the Scheme.
Then Amigo will have to decide whether to uphold your complaint. They have not said how they will do this. For you the worry will be if they simply reject it again.
If they uphold your complaint, then your balance would be written off. But the part of your refund you should get in cash, you would only get a small percentage of – the article above looks at my guesses on how small. These are using very crude numbers but Amigo will not help with more accurate numbers.
Suzanne Graham says
Just stop paying them! I stopped as soon as they announced this shi**y scheme. My bank and my guarantors bank (my mam) have both been advised not to allow any card or DD payments. They have not added any interest on to my account for 2 months now nor have they tried to contact either of us! Which is a shocker in itself because normally there on your back being a minute late with a payment.
I know you can’t directly advise Amigo customers to stop paying Sara but I can!
See it didn’t take the Amigo stakeholder too show his true colours with his final comment. Happy to say I won’t be paying his wages! anymore