You can now vote on Amigo’s Scheme.
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.
Contents
The approval process for the Scheme
On 30 March, the First Court Hearing gave the go-ahead for Amigo to organise the creditor voting after the FCA said it does not support the Scheme but it won’t oppose it.
From here the approval process is as follows:
- Late April – creditors’ meeting
A formal creditors’ meeting will be held online where customers and FOS can vote on whether the Scheme should go ahead. But you don’t need to attend this online meeting to vote. Instead you can vote now on a page that Amigo has set up. - 19 May – Second Court Hearing
The second court hearing will consider whether the Scheme should go ahead and whether it is fair to customers. - Late-May – provisional start date for the Scheme.
An overview of the Scheme
When 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 still 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. 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.
Amigo customers – voting on the Scheme
For more about the proposed Scheme, read the Practice Statement Letter and Explanatory Statement and look at my other articles on the Scheme.
You cannot submit a Claim to the Scheme until it is approved, see the Timetable above. All you can do now is vote. You can vote here.
First Log into the Scheme Portal by supplying your mobile number and date of birth. They then send a code to your phone to log in.
Then you can vote. It warns you you should only vote if you think you have a valid claim. Amigo isn’t handing out money to everyone who puts their details in – they will be assessing your claim.
If you don’t know if you have a claim, read Refunds for guarantor loan borrowers or Complaints by guarantors. Those pages explain what “affordability complaints” are and will help you understand if you may have a good claim on the Amigo Scheme. Briefly:
- guarantors who did not make any payments and where the loan has been repaid in full do not have a possible claim to any refund.
- borrowers who have repaid their loans have a claim if the loan was “unaffordable”, for example if repaying it meant your other debts increased.
- guarantors who have made payments to a loan that has been repaid can complain if the loan was unaffordable for the borrower or for the guarantor.
- borrowers and guarantors for current loans can complain if the loan was unaffordable for them.
The last voting page is about the value of your vote. This is needed as the vote has to be passed by 50% of the number of people voting and also by 75% of the value.
You don’t need to complete this value if you are making an affordability complaint as Amigo will calculate it for you. But there is an exception – if your loan is pretty old, over 6 years probably, Amigo may not be able to find it – in this case you can enter the amount of interest you paid as the value.
If your vote is about any other issue, you need to put the amount of money you are claiming as the value. Leave a comment below if you aren’t sure.
After you have voted, you can go back and change your vote if you want.
Vote Yes or No?
I am not going to tell you how you should vote. But I think Amigo’s “vote for your money” slogan is way too simplistic.
Here are some points to consider for people in different situations.
Current borrowers and guarantors
For most people, the number one priority is getting their guarantor released and their balanced reduced or cleared. The chance of a small cash refund is pretty unimportant compared with that.
You can get your balance reduced/cleared if your claim is upheld in the Scheme OR if it is upheld by the administrators if Amigo goes under.
You won’t get any more from the Scheme than you would from administration unless you also get a small cash refund – there won’t be any cash refunds in administration.
So what matters is whether your claim is MORE LIKELY to be upheld by Amigo or by administrators.
I am concerned that Amigo may be going to reject some good complaints, see Will Amigo’s Scheme reject too many claims? In that case you may be better off voting No and hope the Scheme is rejected.
If you have had several loans, there is also the problem of the “unpaid interest deduction”. This is an amount Amigo takes off your refund if it upholds a top up loan but not an earlier loan.
That could mean you are left owing Amigo more in the Scheme than in administration. See Amigo should end unpaid interest deductions and remove CCJs for details.
Borrowers and guarantors where the loan is repaid
Guarantors only have a claim here if they made payments, otherwise there is nothing to be refunded.
In administration, there won’t be any cash refunds, only balance set-offs for people with current loans
So in administration if you don’t have a current loan you will not get anything.
You can vote for the scheme if you are happy to only get paid a tiny amount, perhaps 10% of what you should have received.
Do you think getting only 10% is fair?
The FCA doesn’t like what Amigo is doing but says it is up to the customers to decide if it is fair. So you can say No if you want.
Customers are the huge losers with this Scheme. Amigo’s bondholders are being paid in full. The list of the Amigo directors’ shareholdings is given in section 16 of the Explanatory Statement. They stand to make millions if the share price goes up a lot.
If you vote No, you will still be able to make a claim in the Scheme if it does go ahead.
Kirsten says
Hi Sara,
I’m considering taking Amigo to court and wondering if you think this is worthwhile or pie in the sky thinking?!
I would struggle to cover a loss.
I am the guarantor for a 10k loan for my friend. I’ve made 38 payments, totalling £9825.25. The borrower has made 4. When I agreed to become guarantor, I assumed, as stated on their website, amigo would have completed appropriate checks to ensure affordability for the borrower. It obviously wasn’t affordable. I feel like I’ve been conned. Should the SOA go ahead and I’m lucky enough to receive a small percentage of what they’ve taken from me, whilst continuing to exploit people, is insulting. I’ve had a complaint with the Ombudsman since 10th March 2020 , with no prospect of support now. I don’t think I have anywhere else to turn, but am hesitant to go down this route.
Thanks.
Sara (Debt Camel) says
Bringing a court case is not quick – there is no chance of this being heard before either the Scheme starts or (if the Scheme is not approved) they go into administration, at which point the case would be ended.
I am afraid your choice at the moment comes down to voting to approve or reject the Scheme. Then sending in a claim to the Scheme or to the Administrators.
Are the payments affordable for you?
Kirsten says
Thanks Sara, I suspected it was a lost cause, I’m just so insensed with all of this. I’ve voted against the Scheme because I don’t think they should be allowed to continue to exploit other people.
I stopped payments in March – they told me they’ll take me to court, (a few days ago, despite saying otherwise at the hearing) but I’m not too worried about that.
Thank you again for all your help with this.
Kyle says
I received a response from My Senior FO adjudicator. She has informed me that the FO as an organisation has taken the decision to halt all complaints about amigo because amigo have stated they will go into insolvency if the scheme is not put through and they need to work out what that means for everyone. She had also stated that before this she asked one of her colleagues that is in contact with the higher ups in amigo to chase my case to no avail. So I’m sorry to say this to anyone waiting on a response from ombudsman or amigo but it ain’t gonna happen. I guess we all need to wait to see what happens after this scheme is put through or not. Sorry to everyone who’s been let down by the system.
Sara (Debt Camel) says
Let down by the FCA really… I understand FOS’s dilemma, what is the point if them beavering away and getting your hope up if Amigo are going to ignore whatever they say?
Kyle says
Yes let down by the FCA too. They had stated that they wouldn’t even challenge the scheme, even though they could have done. If it goes through then they are letting customers down and setting a president for other companies to take the Micky. So I do believe FO have let people down. And for not taking any action when companies ignored them, no sanctions or anything.
Sara (Debt Camel) says
FOS has no powers, no sanctions when it is ignored. Blame the FCA for that too.
Hugh says
Hi Sara
I made a complaint to Amigo who conveniently said they had no details of my loan. I raised it with the ombudsman and after investigating it appears that data was found. The ombudsman ruled in my favour on 18th November 2020 with a chance for Amigo to respond by 2nd December. They have not responded to this day , not even rejected the ombudsman decision. As this all happened before their proposed scheme where does this leave me?
Sara (Debt Camel) says
So Amigo dragged this out by denying it had the data first, then ignored the FOS adjudicator decision to save money… your claim will now have to be decided in the Scheme if that goes ahead.
Amigo has not said that they will uphold complaints like yours where there is already a FOS adjudicator decision in your favour. It sounds as though you only had one loan – these are the cases that I am concerned may be completely rejected. And of course even if it is upheld, you will only get back a very small amount of the interest you paid. Amigo says possibly 10%, I think it could be a lot lower.
Russell says
Hi Sara, can you help me on the following. I’ve had a amigo loan and then top up which started in 2019. I’ve just raised an affordability claim as I had defaults and taken out multiple pay day loans before taking the loan and during at the point of tatting a top up. My financial position has just changed and the payments are now affordable so would my claim be upheld based on when taking the loan out?
I’ve also nearly paid back what I’ve borrowed (maybe 3 more payments) so will just be left with about 3.5k of interest. I’d like that wiped before I start paying interest so which would likely wipe that interest off, scheme or administration? Thanks
Sara (Debt Camel) says
would my claim be upheld based on when taking the loan out?
Yes. (Nice to start with a simple answer!)
You already know, so I am just repeating for other people reading this, that you can make a claim in the Scheme for unaffordable lending and also in administration. And that with a current loan, the balance can be reduced or cleared if your claim is upheld.
So you are right to focus on whether this is more likely in the Scheme (vote Yes) or administration (vote No).
For you, with a loan and a top-up, two things matter.
First will Amigo uphold your complaint?
I am not convinced Amigo is aiming to produce the same results as the ombudsman would have – the Ombudsman is upholding 88% of Amigo complaints. Amigo won’t give numbers about what it expects its uphold rate to be. It has listed what it will look at (see Schedule 4 of its Explanatory Statement https://www.amigoscheme.co.uk/docs/ExplanatoryStatement.pdf) but not said how these factors will be applied to a case.
From my experience of seeing other lender administrations, the administrators normally try to use a process that produces roughly the same results as the Ombudsman would.
So you may feel you have a better chance of the administrators upholding your case.
Second, what if Amigo doesn’t uphold the first loan? If the first loan only ran for a few months there wasn’t much interest paid, so you may think this doesn’t matter. But in this situation Amigo makes a deduction “for unpaid interest” where a loan wasn’t upheld but was settled by a top-up loan that was upheld. They are trying to say the previous loan was never properly settled (even though it was) and so they charge you the extra interest on it.
For some people these deductions are only a few hundred, but other people have had their refunds reduced by thousands, and been left owing a large balance because of this.
The Ombudsman never applies these deductions. So I don’t think administrators would.
The result is, that if Amigo only upholds the second loan and the administrators did the same, you would be faced with a larger balance in the Scheme than in administration.
Russell says
Hi Sara, thanks for the info. I actually missed a key word off one of my question which I was wondering which would wipe the interest faster. If the scheme takes say 12 months to agree before my balance is cleared I’ll end up back paying nearly 3k of interest. If Administration would happen straight away and my claim agreed quicker, then administration would be better for me I guess or if they would end up taking roughly the same amount of time then the scheme would be better as I’d get a cash refund too although only a small one
So which would likely wipe that interest off FIRST, scheme or administration? Appreciate how long it would actually take for both is unknown but a best guess would be great so I don’t wastefully pay interest I wont get back
Thanks.
Sara (Debt Camel) says
That is really crystal ball-gazing.
Because Amigo has been working on this for a while, administration may be much simpler, eg they can just use the same page for people to enter claims that Amigo has already got ready for its Scheme. Administration doesn’t have to put the large amount of work into sorting out cash refunds. And my guess is they will be upholding more claims so there will be fewer appeals to get through.
BUT
Once the Scheme is going OR administration is going, if your balance at the start of the Scheme/administration would be cleared by the calculated redress once your claim is decided, you will get all the additional payments you have made during the Scheme/administration repaid IN FULL.
Hardly anyone knows this, it comes as a big & pleasant suprise to people in administrations when they get two payouts, one the tiny % of their refund and another much bigger one of all the payments they made during the administration.
As a result, the timing of the Scheme / Administration is not the important thing for you – that is whether Amigo Scheme will clear your balance. Because it seems more likely that this will happen in Administration than in the Scheme, see my previous reply.
Chlooo says
Hi
I took out a £5000 loan in December 2019 I have been paying back £197 a month with small breathing over Christmas last year. My account is still saying I owe £4988. I havnt put in a complaint yet or voted yet and I don’t what is best to do? If I havnt put in a compliant or voted what will happen if they go into administration?
Sara (Debt Camel) says
That looks like a 5 year loan. How much have you paid them so far? If your balance is “only” £4988, that looks like you have paid more than the £5000 you borrowed, is that correct? is the start date correct as the numbers don’t seem to add up?
Has it been hard to repay the loans and has doing this meant that you have had to borrow more elsewhere or you have got behind with some bills? If yes, then you have “an affordability complaint”.
You can then make a claim in the Scheme for unaffordable lending. If the complaint is upheld your balance would be cleared (as you have repaid more than you borrowed) and you would get a very small cash refund, possibly £100 or so.
In administration pretty much the same happens – you can make a claim for unaffordable lending, if it is upheld your balance would be cleared. But there sould be no tiny cash refund.
For you it is obviously more important to get that balance cleared than the chance of a tiny amount of cash. So what matters if whether your complaint is more likely to be upheld by Amigo in the schemen (so you would vote Yes) or by the administrators (so you would vote No).
It is impossible to be certain about this! We know that the Ombudsman has been upholding almost all Amigo complainst – 88% of them
I am not convinced Amigo is aiming to produce the same results as the ombudsman would have – Amigo refuses to say what it expects its uphold rate will be, even though it has to have extimated this number – you may concule that it is disappointingly low…
Amigo has listed what it will look at in a case (see Schedule 4 of its Explanatory Statement https://www.amigoscheme.co.uk/docs/ExplanatoryStatement.pdf) but not said how these factors will be applied. You may feel you have no idea how Amigo will decide your case – I think “one loan” cases are most at risk for being rejected by Amigo.
From my experience of seeing administrations, the administrators normally try to use a process that produces roughly the same results as the Ombudsman would.
So you may feel you have a better chance of the administrators upholding your case than Amigo.
Chlooo says
Hi
Yes I borrowed £5000 over 5 years at 197 per month I’m December 2019 I had a 2 month breathing space for December 2020 snd January 2021. Meeting the repayments are a constant struggle I’ve had to borrow money from family or not paid my rent to meet the payments.
How do I put in a complaint with out voting or would I have to vote?
Sara (Debt Camel) says
you don’t have to vote. Putting in a complaint is completely seperate.
You can just wait until the end of May – then if the Scheme is going ahead, Amigo will put up a page where you enter your complaint. Or if the Scheme doesn’t go ahead the administrators will put up a page for complaints.
Kelly says
Ok I finally spoke to someone from amigo who actually knew what they were talking about today .this is what she told me . I have a current balance of 3300 at the moment I have paid 4700 on this loan and before this I have had several other loans and top ups with them . So for argument sake now say I’ve paid 10000 in interest if they gave 10% back they would only take 1000 of the current balance and if I’ve already paid the loan they would give me 1000 cash redress . So they are only giving the percentage back on outstanding loans which I’m shocked about for the people with outstanding balance as I was under the impression if I was owed 10k and I would have my whole 3500 wiped and that would have been it . Which I would have been happy in this situation to get my balance wiped , but if be very very lucky if I got 1000 off it and also we all know it ain’t going to be 10% . I have voted no to this scheme as they are an absolute joke . I’ve gone and paid 1000s in interest around 14k in total and id be lucky to 500 if that now . This is so wrong
Sara (Debt Camel) says
Actually they didn’t know what they were talking about.
I was under the impression if I was owed 10k and I would have my whole 3500 wiped and that would have been it
What you were told was wrong.
Say your redress comes to 10000 and your balance is 3500 and Amigo are paying out 10% of the refund (as you know it could be a lot less).
What would happen is the 3500 balance is cleared, reducing the remaining redress to 6500. You would then be paid 10% of that – 650 in cash.
If Amigo went into administration, you would also get the balance completely cleared but you wouldn’t get any cash refund
The risk for you in the Scheme is how many of your loans Amigo would uphold… This is a real problem, last year people were getting bizarre decisions from Amigo, eg upholding loans 2 & 3 and not the larger and later loans 4 & 5.
And Amigo also adds on a deduction for “unpaid interest” if it upholds a top up loan but not the previous loan. They are trying to say the previous loan was never properly settled (even though it was) and so they charge you the extra interest on it.
For some people these deductions are only a few hundred, but others have had their redress reduced by thousands, and been left owing a balance because of this.
The Ombudsman never applies these deductions. So I don’t think administrators would.
The result is, that if Amigo only upheld a few loans and the administrators did the same, you would be faced with a larger balance still owing in the Scheme than in administration.
Kelly says
Thats odd cause she said my balance wouldn’t get wiped cause only 10% for example would only be given so ie 10k intest 10% would be 1000 off outstanding balance of 3500 . Everyone i phone them nobody seems to give the right info. On this current one I’ve paid 4700 and 3300 left . I don’t see the point in carrying on paying them now . Would i be better off stopping now
If i carry on paying off this 3300 balance by the time this scheme goes through next year if approved I would have cleared my balance and I am paying dead money basically
Sara (Debt Camel) says
Honestly she was wrong- but it doesn’t inspire confidence, does it…
Is making the payments very difficult? Could you talk to your guarantor about them cancelling their direct debit, explaining about the fact with so many loans you have got a good complaint?
The answer on stopping paying is different depending on your answer to those questions.
Kelly says
My mum is my guarantor and she is happy to stop the payments. The situation im in is that I lost my home because I couldn’t afford amigo and the rent and ended up heavily in debt cause I prioritised amigo so my mum wouldn’t get into trouble so I topped up a number of times just to get by for few months but in the end got to the point I lost it all and had to move into my mother with 2 children and my partner and I can’t move out again until amigo is cleared as I tried last year but wasn’t do able . As I’m home now I’m just trying to clear my debts but it is hard
Sara (Debt Camel) says
Ok, there is a much longer answer if you can easily afford the repayments (it does happen to some people who have a good affordability complaint, eg if they have had a good pay rise!) but you can’t so this is simple. Especially as your guarantor knows what is happening and will stop her payments.
It is better for you to use the money to clear other debts that you may be paying interest or charges on.
If you stop paying, it will hurt your credit record but I guess that is already pretty poor. Also the negative mark will be removed if you win your claim in the Scheme or administration.
It won’t hurt your guarantor’s credit record as the Amigo loan does not show on there.
Amigo will make unpleasant noises but there is no time for them to take you to court before the Scheme starts and they have said that they will not commence legal proceedings until a claim in the Scheme has been decided.
Exactly the same happens in administration. No one is going to take you or your guarantor to court until your claim has been decided.
Simon says
Do we know on what date Amigo are likely to enter the scheme if it is approved?
I hear the court date is set for the 17th May.
Sara (Debt Camel) says
The second court hearing is on the 19th May not the 17th,
Amigo says in its Explanatory Statement that
“The Scheme should come into force within a week after it is approved by the Court. This is expected to be around late-May 2021”
Kelly says
Is it right the won’t be paying out till next year minimum
Sara (Debt Camel) says
Yes. Amigo hopes the Scheme will start in late May. They will put up a page to make claims on – this will be up for 6 months.
They can’t work out how much to pay anyone until all the claims have been settled. this includes going through the appeal process.
Amigo says they expect to pay in the first half on 2021. I suggest people should plan that this will be towards the end of that period.
Lee says
Hi
Sorry if this has been covered I just want to be really clear in my head how this all works I am getting confused what would happen if upheld
Loan 1 : £5000
made 25 payments @ £197.62 – totaling £4940.50
cleared balance in full early (in 2015) – £4371 (struggling to pay and parents cleared balance for me)
total paid – £9311.50
Loan 2: £3500
made 15 payments @ £138.34 – totaling £2075
balance stands at £3219
thank you so much for your help.
Sara (Debt Camel) says
ok, so what would happen in the Amigo Scheme if both your loans are decided to be unaffordable…
– Loan 1 you paid £4296 in interest.
– the current loan you have so far paid 2075 – that is less than you borrowed, so if the interest is removed from this loan you would owe £1425.
– The 4296 in interest from the first loan will be used to clear the balance left on the current loan, so the calculated refund would then be £2871.
– But you would only get a small amount of that – Amigo says possibly 10%, which would be £287 – I think it could be a lot less.
If the Scheme doesnt go ahead, you make the same claim in administration. If they too uphold both loans, much the same happens – your balance is written off, but then you wouldn’t get the small amount of cash.
But what if Amigo only upholds the second loan, not the first? Then you would be left owing a balance of £1425 still to Amigo.
The administrators may be more likely to uphold both loans than Amigo are. Administrators usually try to do what the Ombudsman might have done, and the Ombudsman is upholding 88% of Amigo cases!. But Amigo hasn’t said it will be trying to roughly do what the ombudsman does…
Most people with a current loan think getting a small amount of cash back is much less important than maximising their chance of getting the current loan cleared.
When you vote, you are basically deciding if you want the Scheme to go ahead (vote Yes) or not (vote No).
Lee says
Super thanks one voted No to the scheme don’t see why they should profit from other people’s misfortune. Thanks for clarifying
SaraB says
Hi Sarah
Can I just ask about those of us who have paid of loans. I had a £5k loan in 2013 and topped up again in 2017. I was then (2019) lucky enough to be offered a consolidation loan with a credit union through work at 4%. as opposed to Amigos 49%. At the time I was running my life on payday loans in a desperate attempt not to default on this loan and bring my guarantor into this situation. The credit union was a life saver.
I have a claim in to Amigo as of January this year which is now with the ombudsman.
Am I correct in understanding that if I vote no. They go into administration and we will receive nothing . ? Why is that .. ? Amigo must have millions in the bank from charging 49% interest .
Is the line that voting ‘no’ means you get nothing actually true or a potential bluff by the management of Amigo in an attempt to keep this business bringing in the money. ?
For those of us with loans paid off (but in my case I still have a loan just not with them) is the voting decision as stark as
Vote yes and get 5-10% of what I’m owed.
Vote no and guaranteed to get nothing .
Sara (Debt Camel) says
You are asking me to predict the future. All I can do is guess what may happen. I hope this is an informed guess because I have been following Amigo complaints and other lender administrations for several years, but it is still a guess.
Am I correct in understanding that if I vote no. They go into administration and we will receive nothing? Why is that? Amigo must have millions in the bank from charging 49% interest .
If the Scheme as proposed does not go ahead, then Amigo says they will go into administration. There are other options possible, such as proposing a change to the Scheme that would give customers more money.
If Amigo goes into administration, customers whose loans have been repaid will get nothing. Customers with current loans can have them reduced or cleared, but that isn’t relevant for you.
They have a lot of money in the bank, well over £100million. But much of this is money they borrowed which they have to repay.
Is the line that voting ‘no’ means you get nothing actually true or a potential bluff by the management of Amigo in an attempt to keep this business bringing in the money?
That is hard to tell. people with repaid loans will get nothing in administration but as I just said there are other variations on a Scheme that could give customers much more. I can’t tell whether these are likely, Amigo wants you to think they aren’t to get people to vote Yes – I don’t know if this is a bluff.
Vote yes and get 5-10% of what I’m owed.
It definitely isn’t as simple as that!
First there is the question of whether Amigo will decide either your first loan or the top-up or both were unaffordable.
If they don’t you get nothing. Amigo is being very vague on how it will make these decisions. It has listed what it will look at (see Schedule 4 of its Explanatory Statement https://www.amigoscheme.co.uk/docs/ExplanatoryStatement.pdf) but not said how these factors will be applied to a case.
That’s like someone who wants to buy a house saying they will look at the price, the area, the number of bedrooms and how large the garden is – all sensible things to consider but it doesn’t give you, who are trying to sell your house, any idea if that buyer is going to be at all interested in buying your house.
Then there is the problem of how Amigo works out the refund if it only upholds the second loan, not the first. You would think that is just arithmetic… but in this situation Amigo makes a deduction “for unpaid interest” on the first loan. They are trying to say the previous loan was never properly settled (even though it was) and so they charge you the extra interest on it.
For some people these deductions are only a few hundred, but other people have had their refunds reduced by thousands.
The Ombudsman never applies these deductions – it was invented by Amigo last summer to try to save it money. I had hoped it would be scrapped as unfair in the Scheme but they are going ahead with it.
So there is a chance you will get nothing. And there is a chance your refund will be assessed at a LOT lower than the ombudsman would and then you only get a tiny percentage of that.
SaraB says
Hi Sarah,
I’m very grateful for your excellent, clear and logical explanation. Yes you are right. This is crystal ball gazing.
However for me, it will be between a tiny percentage of my correct redress or nothing at all if this is left to Amigo to decide. Compared with nothing if they go into administration.
It may be cutting my nose to spite my face .. but I would rather the ombudsman oversea this bunch of cowboys who (in my view) are trying to manipulate all the regulatory protections by blackmail.
I will call their bluff and vote no.
Thanks for helping me make a decision by providing clear facts rather than telling me how to vote. I appreciate others will do better from voting yes.
SaraB
Lewis says
When are the details of the vote released?
Sara (Debt Camel) says
At a guess, in the second court hearing.
Catherine says
Hi Sara. I put in a complaint with amigo last year around June. Got a decision in august they upheld my 1st 2 loans with them and not my other 2 and offered me just under £4000 which would have left me still around £3000 to pay off my current loan. I decide to turn the offer down and sent it to the FO. The FO has had my case now since last and have done nothing with it and now of course have paused doing anything until after the vote. I’m not happy the FO have dragged their heals and now looks like I’m gonna get next to nothing of my case is upheld. What I’d like to know if I get the readdress it should be around £14000 but if I get only 5% of that it’ll be around £700 which will come off my current loan I’m still paying but will still leave me around £6000 left to pay. Will I still be expected to pay that £6000 even though it was upheld that I’d been miss sold the loans.
Scott says
Hi Catherine,
If the Scheme goes ahead then your best case scenario will be that Amigo stick with their original offer and refund the interest from loans 1 & 2. This will be deducted in full (not a percentage) from your current balance and you will still be expected to pay the rest.
Worst case would be Amigo revisiting your complaint as you rejected their offer and deciding that no loans were unaffordable and leaving you to pay your current balance in full.
Please remember that no matter what Amigo are saying about the Scheme, this is not being done for the benefit of the consumer, it is being proposed in order to save Amigo money and to allow them to continue trading and causing more hardship for the financially vulnerable.
As you have an outstanding balance, in my honest opinion you would likely have more chance of the Administrator’s upholding your other loans than Amigo changing their original decision to uphold more.
If the Administrator’s uphold all your loans you would not receive any funds back but your last loan would at least be cleared. The Administration seems to be more ethic driven when making decisions rather than profit driven.
Scott
Catherine says
Oh I know it’s not for us it’s entirely for them that’s why I’m voting no to the scheme. I think it’s disgusting what they are doing. I can’t see how they can’t say my loans were unaffordable then change their decision. I also think it terrible the way the FO have handled the amigo cases. I just wish I’d have accepted the offer and it would all be over now x
Scott says
Hi Catherine,
The frightening thing is that if the Scheme is approved, they can do whatever they want as there will be nowhere to escalate the complaint to.
I personally don’t have anything with Amigo but I hope everyone votes against the scheme rather than thinking they may get a good deal with a token payment from Amigo. As I said if Amigo don’t uphold a complaint, there will be nowhere to go with it.
Scott
Alex says
Hi Catherine / Scott,
I am an interested observer and do not have a vote. It is horrible that people have trouble getting into debt with loans and interest rates that they can’t afford. It is clear that Amigo has done the wrong thing for many people in providing them loans that they shouldn’t have.
But it is incorrect to say that there will be no appeals process. In the hearing it was said that they will be appointing an independent scheme adjudicator – most likely an independent accounting-type firm separate to Amigo – to handle appeals.
And on independence, I think it is worth pointing out that Amigo appointed a separate firm of lawyers for the court hearing, independent from Amigo’s lawyer, to highlight issues and concerns that had been raised by creditors and media, including Money Saving Expert and Debt Camel.
If Amigo hadn’t, it would have been only Amigo’s lawyer arguing for the scheme and only those creditors/guarantors who had the opportunity to speak in court. That seems to show Amigo trying to be fair in the process. Why would you appoint a lawyer to highlight potential problems and concerns with the scheme to the judge, other than to be fair?
I think the FCA should be doing a better job than they have, but they also don’t want to be on the hook for putting Amigo into insolvency. If the FCA penalises Amigo and they go insolvent and creditors get a bad outcome (ie no compensation) then it will be their fault.
A
Sara (Debt Camel) says
But it is incorrect to say that there will be no appeals process.
People posting here want a genuinely independent appeal process such as the Ombudsman who can look at all aspects of a complaint.
to highlight issues and concerns that had been raised by creditors and media, including Money Saving Expert and Debt Camel.
And who significantly misquoted what I said… not impressive.
Why would you appoint a lawyer to highlight potential problems and concerns with the scheme to the judge, other than to be fair?
To give the appearance of being fair?
If Amigo really wanted to be fair it:
– would be asking the bondholders to be part of the Scheme so there would be more money for customers
– would provide for customers to receive much more from future profits than the current miserly proposal
– would not have rigged the vote weighting in the ballot against customers with a current loan
– would not be carrying on with its unfair “deduction for unpaid interest”
– would be proposing to set aside CCJs where the loan is found to be unaffordable
– would be open about the percentage of complaints it expects to uphold instead of secretive.
There is nothing fair about what they are proposing at all.
–
Scott says
Hi Alex,
Never in my 53 years have I ever heard such utter tosh. Perhaps you are one of the non direct employees of Amigo spreading the same bile about how fair Amigo are trying to be as has been seen elsewhere online. Obviously trying to pull the wool over people’s eyes in order to get this scheme approved.
It is amusing that you never commented on any of the other pages i.e Wonga, Sunny, Quick Quid or even provident who are also proposing a similar scheme.
The fact remains that this scheme is purely for the benefit of Amigo and their directors and shareholders and is of no benefit to the thousands that have suffered as a result of Amigos ethics in the past.
I’m pleased that Sara has addressed your obviously pathetic points and think it time that the troll either goes back under the bridge and waits for the Billy goat Griff’s or slides back under the stone that they crawled out of.
Siobhan McMurdo says
Sara I have finally had an email from Amigo this morning to say they will be processing my redress outside of the scheme due to the length of my complaint process. Amigo contacted FOS two weeks ago to offer my redress but I’ve not heard a thing from FOS so have emailed them this morning to say I accept the offer.
Thank you for all of your help and support. Finally two years later there is an outcome! I will make a donation when the redress is received.
Kelly says
Did you get an offer before the scheme ?
Ian says
So they are still doing some redress outside the scheme?
That’s good news unless this is a one-off as I got the impression everything not already resolved is automatically going into the scheme.
Sara (Debt Camel) says
They have been processing some claims that FOS was treating as priority. I thought this had now stopped, it’s good see one still getting through.