UPDATES
This page refers to Amigo’s first Scheme of Arrangement which was rejected in May after it was opposed by the FCA as unfair to customers and too generous to shareholders. See Court rejects Amigo Scheme for details.
On 13 December 2021 Amigo published details of its new Scheme. See Amigo proposes a new Scheme – but is it fairer?
On 15 March 2022 the court approved the voting arrangements. Voting started on 16 March, see Which way should you Vote? for the points to consider.
This page on the old Scheme is now no longer relevant. Please leave any comments and questions on the new page.
The approval process for the first Scheme (this ended in rejection)
On 30 March, the First Court Hearing gave the go-ahead for Amigo to organise the creditor voting.
An online page to vote was set up and a creditors’ meeting held.
The FCA has published a letter saying:
The FCA considers that a fair compromise could have, but in this case has not been, proposed to Scheme Creditors to vote upon. Therefore… the FCA has decided that it intends to appear at the Sanction Hearing through counsel to oppose the sanction of the Scheme, even if approved by the requisite majority of Scheme Creditors, on the basis that the Court cannot be satisfied that the Scheme in its current form is fair.
On 19 May the Second Court Hearing took place. The FCA opposed the Scheme going ahead
On 24 May the judgement in the case was published – the judge accepted the FCA’s arguments and did not approve the Scheme.
An overview of the first Scheme as it was proposed
Amigo is proposing a Scheme because it can’t afford to pay refunds to all the customers who were given unaffordable loans. It says it will go into administration if the Scheme is not approved.
Amigo says customers may get a cash refund of about 10% of their proper refund value. I think the amount may be lower.
Customers with a current loan, however, will be able to have the full amount of their refund deducted from their balance and their guarantor released in the Scheme if Amigo upholds their claim. And they can also get this if Amigo went into administration if the administrators uphold their claim.
About a million Amigo customers have been texted or emailed about the Scheme. This includes current customers – the borrowers and guarantors for the current 137,000 loans – and all previous customers whose loans have been repaid. If you haven’t received an email about this, check your spam folder!
Amigo has set up a website with information for customers about the Scheme. This contains the Practice Statement Letter (PSL) which sets out more details. And a longer Explanatory Statement.
If the Scheme starts, all open FOS cases will be sent back to the Scheme.
Under the Scheme, customers can put in a claim if they have affordability complaint or if they have any other complaint about a loan or the way Amigo treated them.
There will be a six month period for these claims to be sent in after the Scheme start date. After that time you will not be allowed to make a claim in the Scheme and will not be able to take a complaint to the Ombudsman either.
Amigo will decide whether to uphold each claim:
- The Explanatory Statement lists a lot of factors that will be taken into consideration in Schedule 4.
- Will Amigo uphold the same very high rate that the Financial Ombudsman (FOS) does? It has not said this.
- Amigo will appoint an independent person to look at any appeals – you can’t go to the Financial Ombudsman.
Amigo will then calculate the redress (the legal term for the refund you would have received if there wasn’t a Scheme) for the claims it upholds:
- for borrowers this is the interest they paid.
- it seems likely Amigo will be applying the “unpaid interest deduction” that it started making in summer 2020. This will reduce people’s refunds, see Amigo should end unpaid interest deductions and remove CCJs for details.
- guarantors the calculated refund will be a refund of everything they have paid.
- where a guarantor is being paid a refund, the guarantor payments are removed from the borrower’s account. If the borrower has also had a Claim upheld, interest will be removed from the borrower’s account. A borrower won’t be left worse off after this, but they may get little or no refund.
If you have a balance still owing to Amigo:
- your balance will be reduced by the refund;
- if you still owe a balance after this reduction, you can make an arrangement to repay it at a more affordable rate and your guarantor will be released;
- if the refund is larger than the balance this extra will be paid from the pot of cash Amigo is putting aside and you will only get a small percentage of it.
If you are owed a cash refund:
Customers whose loans have been repaid will have their cash refunds paid out of the pot of money Amigo is putting aside for this. But there won’t be nearly enough money to pay full refunds.
The pot will be divided up between all the people who are owed a cash refund who will all get the same “pence in the pound” percentage of their proper redress.
Amigo is putting in £15m, which could be increased by up to £20m if the balance reductions are lower than expected – this sounds unlikely to me. Amigo is proposing that it will add 15% of its profits in the next four years into this refund pot. As Amigo is currently loss-making this sounds like some jam in a few years, or possibly none at all.
Amigo says people may get paid 10% of their proper refund in the Scheme. On my figures, it could be even less, possibly as low as 5%.
Amigo expects the first payments to be made in the first half of 2022. It may be late in that period as Amigo has to allow time for any appeals to be made and reviewed.
Rob says
Hi Sara,
Can you advise how one should now put in a complaint to amigo? I’m trying to help my sister out with her debt issues and have been working with her drafting letters but I cannot now see how to complain to Amigo. This site says that that you cant email and you have to go through the scheme but the scheme obviously hasn’t been setup yet and I’m just at a loss. I checked Amigos complaints page but the language there seems to imply that you cannot make complaints re unaffordability and it only mentions how you can potentially reduce payments if your income has reduced. Any help you can give would be great as this was beyond unaffordable for her – the loan is approx 45% of her take home pay
Thank you.
Sara (Debt Camel) says
Was this loan unaffordable for her when the loan was taken out? A loan is only affordable if it is likely the borrowetr can make all the loan repayments and still be able to pay their other debts, bills and everyday living expenses. If she could only gte by by borrowing more or getting deeper into her overdraft then it probably wasn’t affordable,
Complaints can be sent to hello@amigoloans.co.uk – put AFFORDABILITY COMPLAINT as the title of the email.
You may as well keep this short as Amigo will not consider it until the Scheme is underway.
How much did you borrow and how much has she paid to the loan so far? Total of cash payments, ignore whether Amigo says they were capital or interest.
Who is her guarantor?
Rob says
Hi Sara, thanks for coming back to me. Shes only recently approached me for help and unravelling everything is proving tricky.
On the face of it it looks very unaffordable to me. She’s a single mum of two kids earning £1000 after tax each month and this loan was £396 per month. This was her fifth amigo loan and it looks like each one was a top up. This one was a loan value of £10,000 of which £8,300 was to pay off the previous loan. Shes had a history of late payments and defaults both on her previous amigo loans and other loans she had at the time. She had multiple payday loans as well when this was taken out.
Ive put in a letter asking that she exercise her right to equitable set off. Shes paid around £12,500 in interest so far with £9800 remaining as the outstanding balance and also offered to settle any affordability complaints from all 5 of her loans in return for the outstanding balance on this being written off – hoping that might speed things along.
Her guarantor is a friend from work, she had hidden this all from her family until its got to the point where she just cannot see a way out as she still has at least 4 years left on the loan.
Thank you.
Sara (Debt Camel) says
Anyone with several top ups usually has a VERY good case for an affordability complaint. And if she had a poor payment history that makes her complaint even stronger.
If Amigo will let her have what it calls “Equitable Set Off” then they will agree to her pausing paying and will not go after her guarantor.
But if Amigo refuse, then she needs to consider talking to her guarantor about the whole situation and whether she should stop paying, see
https://debtcamel.co.uk/stop-paying-amigo-pros-and-cons/.
Does she have any priority debts – rent arrears, council tax arrears, behind with energy bills etc?
rob says
She was considerably behind with her Rent (council property) which family helped her to clear 2 months ago as it got down to the deadline for eviction as she had almost £10k in arrears. We arent able to help her financially with the rest so Ive been trying to help her make payment plans / other arrangments. Shes on a prepaid meter so no utility bills.
Sara (Debt Camel) says
Does she have other loans, credit cards, catalogues, overdraft debts?
A says
Hi Sara
Is there any word of the new scheme yet for Amigo.
Sara (Debt Camel) says
No!
There will be a quarterly update on Amigo’s finances at the end of this month – it will be interesting to see what their cash balance is and how much secured debt has been repaid. The way the FCA has allowed them to stop complaint payouts means they must be generating large amounts of cash. Which should mean that a lot more is available in a second Scheme for redress payouts. I am surprised Amigo is letting this drag on.
Timing-wise, 8 weeks is a pretty tight timetable from the announcement of the Second Scheme to get through the 1st court hearing, voting, and second court hearing. And with Christmas, at a guess any Scheme can’t be live much before end January.
A says
Thank you Sara for your reply. As per usual, we just have to wait.
DM says
Hi Sara, what’s your thoughts on the FCA approving a revised scheme with the continuation of deductions for unpaid interest, as could be additionally detrimental to any of us that still have outstanding balances after multiple top ups where otherwise the balance would be cleared? If there is an agreed pot for payouts however small, it would still leave a lot of people with outstanding balances Amigo will benefit from or alternatively if they removed this element in the calculation for a more efficient cost in calculation /administrative costs but deduct from the pot, would this reduce % payments for those who have cleared their balances. Which do you think would be considered as fair by the FCA?
Sara (Debt Camel) says
I don’t even know how much the FCA is aware of the deductions for unpaid interest issue. i would hope they are and that they see it is unfair as it goes against the approach FOS takes.
How much money is there for refund is largely irrelevant here. This deduction should be banned if there is no cash for refunds or a lot.
Amanda Byrne says
Hi sara. I have stopped paying amiego loans since july. This evening they have sent me a message plus phoned me about going forward and whatvi can afford. Personally I would rather see what the new scheme was about. Any advise please
Sara (Debt Camel) says
This last 10k loan – do you know how much you have paid to them?
Amanda Byrne says
I have had loans since 2005 and I have had top up after top up paid 298 a month for the last 5 years on 10.000 loan
Sara (Debt Camel) says
In that case you have repaid much more than the amount you borowed. Read https://debtcamel.co.uk/stop-paying-amigo-set-off/ and if that sounds like what you want, go back to Amigo and say you want the right of equitable set off and you will not be paying them any more money until they decide your complaint.
sean mcconkey says
regarding complaints taken by the ombudsman’s will our cases automatically get picked back up once amigo have sorted what they are doing or will we need to go through amigo again
Sara (Debt Camel) says
We will have to wait and see the details for how the new Scheme will work – I could guess but there isn’t any point!
Marianne says
I had my final compensation letter from the ombudsman back in March saying that I had been irresponsibility given the loan. Will this still stand regards compensation.
Sara (Debt Camel) says
was this from an adjudicator or a final decision from an Ombudsman?
do you still owe a balance on the loan?
was your case being given priority at the ombudsman?
Chantelle says
Hello Sara, I took out a £2000 loan Dec 2018 – I requested a top up of £3000 due to a car issue, so they settled the old loan and my new balance was £5000 in May 2019, monthly payments of £245 which I have since paid in total since the new top an amount of £5366.90 and on my account it states I have a balance of £3415 left to pay. I complained to Amigo in May 2020 and they responded in Dec 2020 to say not upholding complaint as they have done their checks. They made a statement to say “For Loan 2 your monthly income was verified by a 3rd party credit reference agency on the figure of £2365” (This income figure was wrong I didn’t get a monthly income of that amount) therefore it cannot have been verified. They’re next statement was we checked for defaults within 6 months prior of you applying for the loan and there were none. Again this was a lie as I have checked my credit reports and I had multiple. I tried to appeal it (with all of my proof) in May 2021 but they wrote back saying they had already investigated my complaint and issued a final response and there is no longer an active complaint. I then forwarded the complaint to the F/O and has a response in Aug 21 talking about the scheme and said “ We have therefore made the difficult decision not to take your complaint any further forward at this time.
Sara (Debt Camel) says
So I hope you will be able to submit a complaint to the new Scheme when it is set up. At the moment we do not know what the criteria are for you being able to submit a complaint.
Sean says
Has the whole financial world forgot about Amigo.
No website has a clue what’s going on.
No update in months.
No major platform putting pressure on them.
It all seems as though it will just fizzle out.
Its becoming obvious they are dragging heels to line pockets.
Bruno says
There will be an announcement tomorrow at 7am UK time to release their half year results. There may be an update on where the negotiations are progressing with the schemr etc.
The last update in the AGM meeting showed positive collection figures and revealed they had just sent a new scheme to be reviewed.
Let’s wait and see what tomorrow brings
Sean says
Hi Sara,
I made a complaint to both Amigo and FOB back in February. Nothing I have ever heard since.
What should I do? I am the guarantor of a loan that I ended up in paying out. I am trying to get my money back arguing I shouldn’t have been a guarantor in the first place.
Thanks
Sara (Debt Camel) says
You have cleared the loan?
In that case there is nothing you can do at the moment. there is no way to make Amigo look at your complaint.
And if a second scheme goes ahead, you will probably only get back a small percentage of what you paid Amigo.
Sean says
Yes I had to pay it in full.
I see this has been discussed before but would they then consider the loan “not paid” if they compensated me?
Sara (Debt Camel) says
In Amigo’s first Scheme this would not have been a problem. We do not know yet how any second shcme will be set up.
Sara (Debt Camel) says
Yesterday Amigo published their half-year results. They now have a LOT of money in the bank but progress on a second Scheme seems slow. The FCA hasn’t even been sent the final proposal yet and Amigo warns the new Scheme will take about 4 months to go through the court approval process. See https://debtcamel.co.uk/amigo-second-scheme-slow-progress/ for details.
Mark says
Hi Sara,
I took out an amigo loan in august 2017 to try and consolidate debts but not long after I found myself in a bad position due to lots of other debts ranging from credit cards to pay day loans all got on top of me.
so I went to step change for advice and there help was amazing can’t highly recommend them enough to people who are struggling, and managed to get amigo loans to agree that they wouldn’t chase my guarantor which they didn’t, but part of the deal was my interest wouldn’t lower or be removed it would just be extended over a longer period of time and higher payments to them would be made as my other debts would be paid off.
This debt Also got sold on to another company I can’t remember the name but then amigo bought it back again
I am still currently paying them back and the repayments wont finish until mid 2023. I borrowed £8,000, I owed them around £17,000 but now I’m down to £6,400
Because I’m having to go through stepchange and still paying how would any refund work? I have made complaints ages ago and got scheme emails etc…
Thanks
Sara (Debt Camel) says
This was your only loan from Amigo?
Mark says
Yeah this is my only one
Sara (Debt Camel) says
OK, did you make an affordability complaint before, or just ask for help? Did you send any complaint to FOS?
Mark says
I went straight to step change, they asked me to do an affordability check when I called amigo but step change told me not to bother as they had all the information and were going to forward it to amigo on my behalf. No complaint was made to FOS.
Sara (Debt Camel) says
so I am double checking, you have never made an affordability complaint?
If this is the case, then you will definitely be able to make a claim under any Scheme or administration.
(You may well be able to even if you had made a complaint but it is more complicated and may depend on the T&Cs of the Scheme – very few people are in this position as Amigo doesn’t normally let you pay less and not go after your guarantor.)
If you win a claim that the loan was unaffordable at the time it was given, then interest is removed from the loan and as you have already repaid more than you borrowed, Amigo would owe you a cash refund. But in a Scheme or administration, you would only get paid a small amount of this cash refund. In the first Scheme it may have been 10%, I hope it will be more in the second scheme, but even so, it will not be a full refund… as a result for every pound you pay them now, you will be throwing most of it away if you win your claim.
So I suggest you should want to stop paying Amigo now and see how the claim is resolved. As you have paid more than you borrowed, Amigo should agree that it will pause the payments from you because of Equitable Set Off, see https://debtcamel.co.uk/stop-paying-amigo-set-off/, and not ask your guarantor to pay. You can then explain this to StepChange and tell them to take the Amigo loan out from your DMP.
Mark says
So I’ve had an email from amigo asking me to vote for the scheme which was on the 1st of April 2021,
And another one asking if I wanted to be a voice for amigo customers,
I’ve never made any complaints to FOS I got emailed because “I’ve had/ or have a loan with them.
Who do I file a claim with to see if I can get the interest back?
And do I phone amigo up to stop paying them?
Sorry for all the questions I really appreciate your help
Sara (Debt Camel) says
ok so first read https://debtcamel.co.uk/how-to-complain-guarantor-loan/ – that has a template which is no longer right for Amigo, but it looks at what one of these affordablity complaints is and you need to know that.
If that sounds like you do have reason to complain, send Amigo 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 loan. Amigo will NOT look at this now but you need to have made a complaint for the next step.
The read https://debtcamel.co.uk/stop-paying-amigo-set-off/ and contact Amigio and ask for Equitable set off – they should agre as you have repaid more than you borrowed. Then tell StepCahnge to stop paying Amigo from your DMP.
Mark says
Thank you very much Sara, been very helpful. Really appreciate it :-) let’s hope it works
Mark says
Would it have a bigger impact on my credit score? My score isn’t great at the moment anyway it’s currently set at “fair”
I want to improve it over time but asking amigo for an equitable set off would it make it worse in the long run?
Sara (Debt Camel) says
How does the Amigo loan currently show on your credit record?
if you win the complaint ALL negative marks are removed from your credit record.
Mark says
Well on clear score it says it’s closed but on credit karma the status says Delinquent and being marked down as missed payments
Sara (Debt Camel) says
OK, well it’s hard to guess how Amigo may record Equitable Set Off as they are doing two inconsistent things, both wrong, at the moment… at some point if nothing further changes (no complaint, you carry on in DMP) they should realise this and correct your record to show that you are in a payment arrangement or have defaulted if you are 3-6 months in arrears (depends hoe much you are paying when that point is reached). NB in a DMP you should nrmally PREFER a default, even though it looks worse on your credit record as it will drop off your credit record 6 years after the default. Without it will drop off 6 years after the balance is settled, which will be much later.
So basically you have no idea what will happen to your credit record, which is wrong, if you do nothing but you should probably ask for a default to be added and back dated as far as possible.
But if you win your complaint under the new scheme or administration then all negative marks are removed from your credit record, including the missed payments.
Given your credit record isnt good because of the rest of your DMP, what happens to the Amigo credit record [probably doesn’t matter much anyway.
Yt says
Sara thanks for your advice regarding contacting ombudsman re my continuous payment to amigo being authorised by my bank even though I had withdrawn it with them and they had assured me it was cancelled. I have just received a call from ombudsman saying they have upheld my complaint and my bank will be paying me back
Marie says
Hi sara what’s you’re thoughts on what amigo announced the other day about the 115millio they willful into the scheme fund , and are customers who are due redress going to be much better of this time ?
Sara (Debt Camel) says
It looks to me as though Amigo are only putting £15m extra into the pot from an equity raise from shareholders.
All the rest of the money has effectively come from people making repayments to the current loan – and many of those people are likely to have a good affordability complaint.
So what has happened is that because the FCA has allowed Amigo to stop complaint handling, the money from people with current loans has carried on coming in and it is this which is funding the bigger cash pot.
It is in effect a massive transfer of money from the people with current loans (which should have had their refunds removed from the value of their loans at 100%) to people who have paid off the loans (who will now get back a larger percentage than they would have in the first Scheme).
We don’t know yet what the terms of the “winding down” option are.
Nor do we know if Amigo is removing a lot of the odd clauses that seemed designed to make it hard for people to make a claim.
Nor if they will still be applying the unfair “deduction for unpaid interest”.
Or what they say the likely uphold rate is – because the numbers they quoted in the first Scheme did not seem reasonable.
Dave says
Hi Sara
I would like to say thank you for all the support you have been giving, Thank you.
I had a loan from Amigo for £8000 then it was topped up to £10,000 which was unfordable at the time but I was accepted under their criteria
I had multiple payday loans and was / still am in a difficult financial position.
I made a complaint in October 2020 Resolver – The case was then passed onto Financial Ombudsman – Then when the first scheme was rejected Financial Ombudsman said the case will not go any further.
I have not made a payment to Amigo since March 2020 – I currently owe them £4,309.31 – They have not sent any emails/calls to me and my guarantor. Normally if I am a day behind they would send threatening calls and letters but now they have gone quiet.
I have paid more than the loan value and interest back.
My question is what should I do now? Shall I continue waiting until the second scheme has been announced?
Should I send them an offset email? or as I have already complained just leave it how it is for the moment.
Thank you x
Sara (Debt Camel) says
If they aren’t hassling you or your guarantor, then I am not sure what you would gain by doing anything at the moment. It sounds like poking a sleeping lion.
Have you made affordability complaints about the payday loans? Do you have any other high cost borrowing eg Safetynet Credit, overdrafts, catalogues etc?
Dave says
Well most of my payday loans and saftey credit went into ccjs or passed on to debt collectors as I could only afford to pay amigo loans
Sara (Debt Camel) says
you can still make affordability claims after a debt has been sold to a debt collector or after a CCJ. your claim goes to the original lender. Safetynet credit is still going – and they are a pretty easy lender to win against as they could see your man statement so they should have known you were in difficulty – use the standard payday loan template (https://debtcamel.co.uk/payday-loan-refunds/) and send them a claim now!
Who are the other lenders? not just payday, any high cost credit?
Frank says
Sara
That information you have just given is not correct! Once a matter has been before the courts then the FOS cannot get involved, as they are only an Alternative Resolution Organisation, so once it has been dealt with by a court,they cannot get involved. You should not be giving advice, especially when you are wrong! I know you wont print this, as you have your own self righteous agenda here. Shame, as you could do so much to help genuine people, but you don’t, do you.
Sara (Debt Camel) says
You are wrong.
FOS distinguishes between a situation where you defended a case and lost – there FOS will not normally get involved, its function is not to retry court cases – and where a CCJ was given “by default” when the borrower did not submit a defence.
Here is an example of a case where FOS told a payday lender to remove a CCJ: https://debtcamel.co.uk/payday-loan-refunds/comment-page-200/#comment-388345.
Amigo has had to remove quite a few – I have seen the set-aside application Amigo submitted to the court for one of them.
Frank says
Actually, its you that is wrong here, you should check how that particular complaint was allowed to be taken on by the Ombudsman. The Company concerned gave their permission for the FOS to look at that complaint. Why, I do not know, but under the rules, the FOS cannot force themselves to taking on a complaint, once it has been dealt with by a Court. You should read the Disp rules, that they have to abide by. I know they try to make them up as they go, but remember, the FOS was set up by Parliament, as an Alternative Resolution Organisation, nothing more, they are not the regulator, though at time they think they are. The have to have the consent of the Lending Company in those circumstances, which I believe they got. Otherwise they cannot ask and certainly not demand that a CCJ is to be removed. That is purely goodwill on the Companies part. I have no doubt you will not print this reply will you, as it does not go along with your modus-operandi, does it?
Sara (Debt Camel) says
The fact remains that Amigo was routinely removing CCJs when a complaint was upheld. And Dave was, in any case, asking about other lenders where the debt had been sold to a debt collector who obtained the CCJ. So here is a link from a comment posted today where an Ombudsman has agreed they can look at a case against the original lender where a debt collector had obtained a CCJ:
https://debtcamel.co.uk/refunds-catalogue-credit-card/comment-page-28/#comment-459557
Jonny says
Hi Sara
Out of the blue yesterday amigo rang me and my guarantor after no contact despite 5 months of me stopping paying them. The voicemail was can I contact them as they want to discuss how They can help me become debt free. I found this an odd expression to use? I assume they mean come to some sort of arrangement to settle the loan? What do you think is it worth a phone call? As I’ve said before I expect my complaint to be upheld anyway in due course but curiosity is getting the better of me.
Sara (Debt Camel) says
I have no idea, that is a very odd phrase to use. No one has reported being offered any sort of arrangement to settle an outstanding loan.
Sara (Debt Camel) says
Amigo has new published its new Scheme. See https://debtcamel.co.uk/amigo-new-scheme-2/ for details and my thoughts on this.
I am closing comments on this page – please add your thoughts to the new page!