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.
The approval process for the Scheme
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.
From here the approval process is as follows:
- 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
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.
Richard says
Hi Sara
I’ve had eight loans with Amigo – each one escalating in value and used to pay of the previous one. The final loan, taken out in 2017 for £10k with repayments of £395 per month based on a then salary of £33k p/a.
I can’t even begin to tell you the financial, mental and emotional drain this loan has had on me. Still roughly two years left to settle.
I made a complaint to Amigo late last year, and it was largely ignored, and is now with the FOS, but based on the above comments my understanding is this is a dead end and I’m reliant on the “vote”.
I’ve voted no.
I was late in making my payment this month, and they have threatened to issue me a default notice. My question is, should I continue to pay my loan, or is there any value in refusing to pay until the vote is decided? My credit “rating” is poor, and I’m doing what I can to increase it, so I could do without any default notices – is this just a threat from them? appreciate I’m asking you to stare into the future…..
All the best – Rich
Sara (Debt Camel) says
If you win your claim about the last loan in the Scheme or administration any missed payments or defaults will be removed from your credit record.
You have to choose between the temporary problem of having these marks until your claim is upheld (with 8 loans that sounds a very strong claim for the last loan! even if Amigo don’t uphold many others and take money off for “unpaid interest” the last loan should surely be upheld and your credit record cleaned) and the permanent problem of paying them money you will only ever get a tiny amount back on.
(By the way, a Default Notice strictly has nothing to do with having a default added to your credit record. But one missed payment will have been recorded already and after a few a default will probably be added to your credit record. Whether or not they issue a Default Notice.)
You can use the money you are not paying to Amigo to clear other debts and get your credit utilisation down. That will have a long term positive impact on your credit record.
Richard says
Thank you Sara. Appreciate the help.
One last question, would me not paying back also impact on my guarantors credit history?
Sara (Debt Camel) says
the Amigo loan does not appear on your guarantior’s credit record. The only way their credit record can be impacted is if Amigo go to court and get a CCJ. There is no time for Amigo to start court proceedings before the Scheme begins. They have said they will not start court proceedings in the Scheme until a claim is decided.
Yy says
Sara I cancelled dd and spoke to my bank to cancel cpa which they confirmed and my guarantor cancelled her cpa but my bank paid it anyway and are saying I can’t get a refund as it’s a loan company
Sara (Debt Camel) says
You need to put in a formal complaint in writing to your bank – it is theri error they have not cancelled the CPA – the fact it is to a loan company is entirely irrelevant. And check that another payment will not be made next month.
Yt says
Thanks Sara already put a complaint in but they seem to be saying it’s not guaranteed that it won’t be paid out next month even though I’ve cancelled it fail to understand how they will not accept any responsibility for their error they offered me £50 compensation yesterday bearing in mind they’ve paid out £395. to amigo
Sara (Debt Camel) says
Tell the bank this complaint goes to the Financial Ombudsman after 15 days if you have not been reimbursed in full. (It is 15 days because it is about payment services. Not the 8 weeks you have to wait for a complaint about a lender.)
Yt says
Thanks for your help Sara you do great work
Alex B says
I am glad I got in just in time this time and received a full refund on my last four loans with Amigo. My balance of £8,.5K was cleared and I received a refud of £7k+ interest. They refused to pay back interest on my first loan from 2011.
The FCA have just ruled in my favour for a loan with Everyday Loans.
I wasn’t so lucky with Wageday Advance and other payday lenders that went into administration and only received a fraction of the £9800 I was awarded.
Not everyone’s loan is unaffordable but unfortunately the scheme means everyone will be lumped together and those that really couldn’t afford it will suffer.
Tom says
Hi Alex, thats great news about your refund. Was did you recieve that recently?
I’m waiting for amigo to contact after them making an offer on my claim
Alex B says
Hi Tom, Yes, I got this payment in January – so glad I went to the Ombudsman. They acted quicklly to resolve my dispute and even paid my guarantor compensation.
Tom says
That’s great news, I’m glad it worked out for you. I only received my reply with an offer from Amigo at the beginning of last week saying they would settle outside of the scheme. Hoping they sort themselves out before the scheme gets approved or denied.
I know how much stress an amigo loan brings so its great to hear you had a positive outcome and can finally move forward.
Yt says
They’ve offered £75 as compensation but still advise they can only raise a visa dispute I’ve asked them to put it in writing but they still will not accept any responsibility I suppose ombudsman is now the only way to go
Sara (Debt Camel) says
” raise a visa dispute” was this paid on a debt card or a credit card?
Yt says
Sara it’s gone off to ombudsman as they’ve sent me a final response saying they will raise a visa dispute if I want them to but they’re saying as I gave cpa originally they can’t guarantee the withdrawal of cpa
Yt says
Debit card
Scott says
Hi Sara
I took a 3k loan out in August 2017 over 4 years can’t remember the payments I was making. I took a top up loan out in January 2018 of 4.5k, which I pay 192.49 monthly. I have paid well over the balance of what I owe.
I submitted my claim and heard back in august 2020 that I had an unaffordable loan. Unfortunately amigo said that it was affordable, so no money was ever paid out.
I have just been made redundant so I am wondering if it is actually worth clearing my balance as I know I won’t receive the value back or cancelling my continuous payment with the bank. I voted No in the scheme as they voted against my claim in the begin so didn’t have confidence of it been upheld.
Sara (Debt Camel) says
It is normal guidance for anyone losing their job NOT to rush in to settle debts with redundancy pay but to wait until they have got another job. See https://debtcamel.co.uk/redundant-debts/
That applies even more in your situation.
If you win your complaint in the Scheme or in administration, the balance will be cleared.
If you have already cleared the loan, you will get nothing back in administration and only a tiny percentage back in the Scheme. So you will have effectively thrown away the settlement money.
I suggest you explain the situation to your guarantor, why you have a good claim and why you need to stop paying them now. You need to cancel the direct debit and the continuous payments authority if Amigo has your card number. And your guarantor needs to do the same.
this will harm your credit record – but the negative marks will be removed in the Scheme or in administration. It will NOT harm your guarantor’s credit record as the loan is not on there.
Amigo may threaten court action but there is no time for this to start before the Scheme and Amigo has said they will not start court action until a claim has been decided.
Sara lou says
Ok so I’ve woken up to a direct debit of £200 taken from my account from amigo loans which I have not authorised. I had my account settled via the financial Ombudsman back in 2018. I’m unsure how they have been able to do this also without notification. 8m now let £200 down. Any ideas on what I can do ? I’m going to ring my bank to get the money back however how can I prevent this from happening again? Thanks Sarah lou
Sara (Debt Camel) says
This hope should be sorted quickly under the DD scheme.
You need to make sure you have cancelled the DD to Amigo.
Sara lou says
Hi yeas it was cancelled back in 2018 I’m don’t know how they have been able to do it as I’ve had no contact since 2018 and no payments have been made since the account was settled in 2018 and I cancelled. I’ve had no letters from them or correspondence saying that they want to start taking an amount. Also my actual payment was 299. How have they been able set a new direct up as it says via direct debit? I definitely have not set any direct debit up with them.
Sara (Debt Camel) says
I have no idea! I would be interested to know what your bank says…
Sara lou says
Hi so the bank are investigating why they been able to set up a new direct debit without having any correspondence with myself. They said with companies they do have authority to set up direct debits but have to inform the person first. In my case this hasn’t happened and they are going to investigate. They said they aim to get the money back to me today. Its very worrying that they have Bee able to set a direct debit up randomly after so long. Thanks Sara lou
Sam says
I wonder if you could help/advice me on the following, I took outa loan of £5k in 2017 and then later that same year topped it up another £5k, so repaying £10k in total. I was on benefits, so barely affordable, (shocking to think back now that they would even allow someone on £76 a week to have a loan of £10k) anyways, my father was my guarantor, I was repaying the loan for about a year but could in no way afford it, I was having to sacrifice other bills in order to pay the loan and put me in more debt with my other bills, because I didn’t want my father to have to make any payments, it got to a point that I literally had no option than to seek help via a debt management charity and they were going to help me with doing an IVA, but during the process of the charity helping my farther was getting contacted by amigo to make payments in my behalf, months went by and my father was utterly distressed and ended up release money from his pension to pay off the loan, (I now pay back my father for the loan he cleared, it also massively strained our relationship)…
The loan has been repaid in full, I voted YES to the scheme but after reading through many of these comments I’m worried of I’ve made the right choice? I don’t know if I’m misunderstanding the whole thing. I understood it as if I voted against I/and guarantor would have no luck at all for a refund if they go in to administration but if I voted yes then they’re stye possibly that my guarantor would receive their full refund of monies paid and I would receive a percentage of refund from what I’d paid, to which I would be very happy with, as I simply want my father/guarantor to receive his monies back.
Is voting yes the best potential outcome for my situation?
Sara (Debt Camel) says
There is no chance of your father being paid back in full, I don’t know why you thought that was a possibility. If he wins a claim in the Scheme then Amigo say he may get back 10%, I think it may be a lot less.
Did you enter an IVA?
S phynex says
I am the unlucky garentor of an unscrupulous ex friend that lied to get the loan she couldn’t afford, then after making only 8 payments filed for bankruptcy and dumped me with the rest. I have paid over £7000 now, am in arrears because I can’t afford theount she was meant to pay, and still have years left to pay. I have voted for the scheme but don’t know how to put a claim in, will they send me a form once it’s passed??
(sorry for the spelling mistakes I am dyslexic and don’t always get enough of the right letters for predictive typing to work)
Sara (Debt Camel) says
Can I ask how large the loan was? And how large the current balance is?
Do you have other problem debts as well?
Sean Brooker says
Hi
Like everyone here, I have been following the amigo drama closely. I have worked out I am going to lose thousands regardless of the scheme being accepted or not. I voted no, purely because I feel getting 5% of what’s I’m owed, is an insult and shouldn’t be allowed to happen. I’d happily watch Amigo go under.
However I have been watching things closely and have noticed things that have made we question what’s going on.
1st of all, JP Morgan continuously increasing there stake in the company. Is there something they know that we don’t, is a take over on the cards? I can’t see a company investing if they thought…they were going busy.
2nd does this mean that Amigo potentially, know how the vote is going, and already trading and negotiating on that outcome? (I question the legitimacy of the vote anyway)
3rd Did/does Amigo have a plan b that never involved them going insolvent, but just wanted to pay out as less as possible? This would be a very underhanded why to do things, but let’s be honest…why wouldn’t they try!
Just things that I have been thinking about.
Sean Brooker says
But in some more, great Amigo service news…I told them I want to cancel my continuous payments and I’ll pay on the app each month, told me they would go to my guarantor. I didn’t say I wouldn’t pay! (As much as I want to just stop, it’d cause issues with my guarantor). I did say you can’t do that unless I don’t pay and how about I pay you 3-5% of my outstanding balance? They didn’t like that. I wouldn’t mind they have had in interest alone £16000 and I have £1300 left, I feel like I’m just being ripped off at the point.
Not long until we find out now I guess.
Sara (Debt Camel) says
1. Banks put money into all sorts of things they never intend to be long-term rock-solid investments. The amount of money involved is tiny, spare change in a stock traders portfolio. The idea of JP Morgan taking Amigo over is astonishingly unlikley.
2. operationally I would expect Amigo to know how the vote is going. But this is insider information and should not be disclosed, see https://www.lexology.com/library/detail.aspx?g=d8b65660-7939-4d1f-8669-e7a99760bf73
3. Possibly, who knows? Certainly there are other possible options to *this* Scheme or administration, eg a Scheme where bondholders and shareholders contributed more so there would be more in the pot for customers.
Caroline says
Just wanted to share an email which FOS just sent through for a complaint I’ve had open since around Sep/Oct last year.
Amigo says that if the scheme isn’t approved it will likely need to start insolvency proceedings.
We understand that Amigo is writing to customers with more details about the proposed scheme of arrangement, so you should hear from it soon if you haven’t already.
What does this mean for my complaint?
As things currently stand, Amigo says it isn’t in a position to pay redress outside of the scheme if we uphold complaints. So we think it’s fairest to all that we wait for the outcome of this vote – which will affect you and other customers that have asked for our help.
If the scheme of arrangement goes ahead, customers with complaints will be able to make a claim for redress directly through the scheme. It’s usually not appropriate for us to consider individual complaints where there’s a creditor and court-approved scheme. So we may ask you to go through the scheme at that point rather than staying with us.
If the scheme of arrangement does not go ahead though, the directors of Amigo have said they will likely place the company into liquidation.
So, for these reasons, we won’t take your complaint any further forward at this stage. We’ll be in touch as soon as we know more, so you won’t need to contact us for any updates. But, just so you’re aware, it could be a while until we have an update to share..
Nazia Bibi says
Hi sara received a email from fos yesterday saying that they will not be working on my complaint because of the amigo scheme so they said its better to wait for the outcome as amigo are saying they will are not in a position to payout any redress im very dissapointed as i sent my complaint in August 2020 and its was put on priority in feb 2021 and still no result
Michael Atkinson says
I had the same yesterday..
Catherine says
Got the same email. Guess it’s just a generic one sent to everyone with a compliant with them. Personally I’m not happy with the FOS handling of my case. They’ve had it since august last year and did literally nothing with it and now with what amigo have done I won’t even get a fraction of what they owe me!!
bonnie says
Hi Catherine Im in exactly the same boat as you, theyve had it all this time and had an email saying they arent dealing with it no more :/
Gail says
Hi Sara,
I received the below from the ombudsman a few days agoDo I have any hope of receiving the offer? What was the point of amigo doing that if they are just going to let us down with lower amounts?
“Unfortunately as discussed previously, I won’t be able to advise any further. The offers we sent out were communicated to us by Amigo Loans and we aimed to get these sent out to as many consumers as possible before the court hearing regarding the redress scheme. It was always a possibility that Amigo Loans may not be able to pay the offers but we wanted to help as many consumer as possible so we sent them out hoping that Amigo Loans would be able to honour them. If like in your case the offer hasn’t been paid, the only people you can speak to for more information would be Amigo Loans.
I appreciate they may be difficult to contact at the moment and this can be very frustrating but there should be an update coming soon from them regarding the redress scheme, I’d imagine anyone who hasn’t received an offer or payment on a previously made offer will have to now go through this scheme to receive any redress. However, we know as much as you about your offer at this moment as all of our dealings with Amigo are on hold for the foreseeable future (and depending on the future of Amigo Loans as a business, perhaps permanently).
I wish I could help further with this but sadly that is the current situation”
Sara (Debt Camel) says
The point is that it will save Amigo lot of money 😡
Gail says
So basically the only option I have is to take pennies in the scheme?😭
Sara (Debt Camel) says
I am sorry, I have no idea why Amigo said it would settle some cases but has not yet done so. It still may pay you in full. But I think FOS is saying there is nothing they can do to make Amigo do this.
bonnie says
Im leaning towards voting against the scheme; dont want anything to do with keeping them afloat lol, I was hoping for the cash refund like everyone else had got but now I just want it all gone. What might happen if your loan was sold and still had a balance owed – there were 4 top ups but had paid the amount back and more. It was with fos since august last year. Would my loan be wiped in administration .or left paying a reduced amount Thanks b
Sara (Debt Camel) says
In administration you can make a claim for unaffordable lending just as you can in the Scheme.
In the Scheme, if your claim is upheld and the redress is more than your balance it will be wiped and you will get a small percentage (Amigo says 10%, I think it may be less) of any remaining cash refund.
In Administration if the administrators uphold the claim, you will have the balance written off but there would no cash refund,
The question for you is, is your claim more likely to be upheld by Amigo (vote Yes) or by the administrators (vote No).
In my experience administrators usually try to do roughly what the ombudsman would do – and the ombudsman was upholding 88% of Amigo complaints. Amigo may be planning or rejecting a lot more – it hasn’t given any useful information on how it will decide which complaints to uphold.
Also you have had several loans. The Administrators may decide to uphold more loans than Amigo would.
And if Amigo doesn’t uphold them all, then it will apply a deduction from your redress “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 uphold say 2 of your 4 loans and the administrators uphold the same 2, you would be faced with still owing a larger balance in the Scheme than in administration.
Bonnie Knox says
thanks for explaining all that sara, has helped a lot. I understand it much more now.
Derek Han says
Hi Sarah
Will Amigo look to pursue a Guarantor through CCJ if scheme goes ahead? I am only paying Amigo as I feel I have an obligation to protect my Guarantor. I am not worried about them pursing myself, I don’t even live in the UK anymore. I am paying £395 p/m for a 9k balance.
Sara (Debt Camel) says
Will you be making a claim for unaffordable lending? Amigo has said it won’t start court action in the Scheme until a claim has been decided.
The same will happen in administration if the Scheme doesn’t go ahead – your claim will have to be decided before any enforcement action. If you win the claim your guarantor is released.
So if paying that much is causing you hardship you could stop? Explain to your guarantor why and get them to cancel their direct debit ( or continuous payment authority) with their bank?
And you need to decide whether to vote for or against the Scheme. Administrators normally try to make decisions on claims in roughly the same way that the Ombudsman would, and the Ombudsman is upholding 88% of these cases. We don’t know how Amigo will be making the decisions as it has been very vague. So you may prefer administration to the Scheme?
Also if your guarantor couldn’t afford £395 a month, they too can make an affordability complaint to Amigo (or to the administrator?) that gives them two ways to be released as guarantor- if they win their complaint or you win yours.
Derek says
Hi Sara, thanks for that advice. Yes, I have an unaffordable lending complaint since August 2020, did not get seen to before the scheme was announced and have been told it will now be assessed as part of that process, if it goes ahead. I haven’t voted for or against the scheme, I would probably prefer administration, and hopefully the administrators either uphold my complaint or don’t pursue outstanding loans through the CCJ process? I could also try and re-negotiate a lower payment (interest only) with Amigo while this is going on, have you any experience as to how open to this they have been? Many Thanks, Derek
Sara (Debt Camel) says
If you would prefer administration you (and your guarantor?) should vote against the Scheme.
Amigo are generally extremely difficult about agreeing to lower payments. How many £395 payments have you made? Was this your first loan from them?
If you stop paying (or pay less) your credit score will be affected but as you are out of the country you probably don’t care about that? Your guarantor would need to cancel their direct debit and any Continuous Payment Authority they have given Amigo. That can’t affect their credit score as the Amigo loan does not appear on there.
Amigo has said that it will NOT start court action in the Scheme until your claim has been decided. And there is no time for them to go to court before the Scheme.
derek says
Hi Sarah
Many thanks. Yes, I have contacted my guarantor to ensure that they check with their bank re CPA or DD are not authorised. I have had 5 or 6 Amigo Loans since 3013, last one in Jan 2020 which topped up to £10k, hence the £395 monthly payments. I have kept these up to date monthly, no missed payments at all, even on the previous loans, due to my obligations and thanks to my guarantor. I would not want any CCJ action involving them later in the year, but that seems most unlikely? Many thanks D
Sara (Debt Camel) says
One option would be for you to stop paying Amigo but save up the money you would have paid. So if the worst happens and your claim is not upheld, you then have the money you can pay off the arrears with – that would prevent any CCJ action on your guarantor.
Robin says
Hi Guys, I wondered if you could help me? I have had an on going complaint against Amigo since September 2019. I went to the FOS in December 2019, where firstly Amigo made a redress offer and then retracted it. This was pursued further by the FOS and finally, last month on the 20th of April, my FOS investigator informed me that Amigo had finally accepted their ruling and are to make me an offer. I accepted the FOS decision and instructed my FOS investigator to contact Amigo about my acceptance of their offer. She also informed me that Amigo will write to me with full details of their offer and if I have not heard anything from them in 4 weeks, to contact the FOS again.
Judging by the fact that Amigo have been dragging their heals regarding my complaint for almost 2 years, I don’t have much confidence in them ever writing to me.
So is there anything I can do? Can I and should I contact Amigo directly to talk about the progress of my redress or should I just wait to see what happens after the 20th of this month? I don’t have much confidence either way and I just want this whole ordeal to be over.
Many thanks in advance
Dan says
Hi Sara
i’m hoping you can offer me some advice.
I currently have a claim against amigo loans with the FOS i have just had an email from the FOS stating my claim is now on hold due to the scheme amigo have proposed.
I have paid amigo what I initially borrowed in repayments but now find myself really struggling to keep them up meaning i missed the last repayment they have now messaged the guarantor. where do i stand in not paying the repayments until i know what is happening with my claim i get the feeling i could be throwing money away as i am just paying interest back now..does this make sense?
Thanks in advance
Sara (Debt Camel) says
yes that does make sense!
If you think you have a good claim for unaffordable lending and cannot afford the current payments then it makes a lot of sense to stop. If you win your claim tin the Scheme (or in administration if the Scheme doesn’t go ahead) your balance will be cleared if you have paid more than you borrowed.
You need to explain this to your guarantor and suggest they cancel their direct debit and any continuous payment authority to Amigo as well. If they couldnt afford the repayments either, then they too can make an affordability claim.
If you stop paying, it will hurt your credit record (but 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 or your guarantor 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.
So the key question for you is whether the administrators are more likely to uphold your claim than Amigo is? If Amigo is more likely to uphold your claim, you should vote Yes to the Scheme. If you think administrators are, you should vote No.
Obviously there is no definite answer to that! From my experience of seeing other lender administration, the administrators normally try to use a process that produces roughly the same results as the Ombudsman would.
I am not convinced Amigo is aiming to produce the same results as the ombudsman. It 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. 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.
the only thing you gain from the Scheme as opposed to administration is the chance of a tiny cash refund. But most people in your situation say the most important thing is getting the loan cleared and their guarantor released, not any cash back?
Dan says
Thank you so much for your advice it really has helped me understand my situation better i think I have a good case against amigo but they did reject my claim. lets hope this scheme doesn’t go ahead because from what i understand the people who really need the help wont benefit at all.
Thanks again Sara keep up the great work
Danny says
Hi Sara,
I don’t know if this has been brought up within the site already, I’ am a long time customer with Amigo and have had previous loans as well as a current loan (claim made already & changed my vote today to ‘No’ after visiting this site).
My question is how can Amigo differentiate my vote to be 50% (current loan/customer) or 75% (previous loan/customer) as I ‘am surely both due to my previous loans being fully paid off?
Should the court not be rejecting the scheme on the grounds of ‘conflicting votes’ or similar?
Thanks………
Sara (Debt Camel) says
My question is how can Amigo differentiate my vote to be 50% (current loan/customer) or 75% (previous loan/customer) as I ‘am surely both due to my previous loans being fully paid off?
That question seems a bit confused.
All votes are assessed against both the “50% by number” and “75% by value” criteria – Amigo doesn’t choose which.
Amigo has a process that works out what weight to allocate to a vote for the “75% by value” by looking at the maximum cash refund you could get if all your loans were unaffordable.
Gail says
Hi Sara,
Just to keep you updated after being on the phone with amigo for ages they said they haven’t received confirmation from the fos of acceptance. I told the adjudicator and this is the response
“Thanks for your e-mail, sorry to hear you’re still having trouble obtaining the settlement. I did originally confirm you’d accepted the offer when we closed the confirm and let Amigo know on 23 March 2021. After chasing this up for you a few weeks back they told me the same thing, they hadn’t received confirmation from ourselves. I explained we had sent this through and also said in my email that if you didn’t receive this, please take this e-mail as confirmation Mrs A would like to accept the offer.I can chase them up again but it feels like they are stalling here as there is nothing now standing in the way of making the settlement. I’ll send a further e-mail over this afternoon”
Surely these tactics are unfair, can it be reported in anyway what should I do can this be reported to anyone? Surely tactics like this should be punishable?
Sara (Debt Camel) says
I suggest you tell the FCA about this delay.
To do this, email consumer.queries@fca.org.uk and copy this to nick.beal@amigoloans.net and complaints@amigoloans.co.uk
Subject: Why will Amigo (708284) not pay my refund, offered to me by them in March 2021?
Give your Amigo reference number, your name and address.
Give the details of the loan(s) and how FOS was sent the offer from Amigo, which you accepted. Then explain how it hasn’t yet been paid. Attach the latest email from your adjudicator to show this.
Say how stressful this is.
The FCA will not directly investigate your case. But hopefully this will kick Amigo into action.
Also leave them a bad review on Trustpilot https://uk.trustpilot.com/review/amigoloans.co.uk if you haven’t already done this.
Anna says
Hi Sara, really appreciate what you are doing for us.
I was reading through almost every single comet from this page.
I have one question as well, I have a loan with amigo since 2017, and one top up made in 2019. My husband is my guarantor, we made the loan in a time my husband remained without job and I was only working as a fitness instructor, didn’t had fix salary. We did struggle to pay amigo, and to make our normal payments.I did make a few debit cards and my husband as well, plus an overdraft in his bank account so we can pay our bills and debts.
At the moment we have a lot to pay and we really struggle. He is working at the moment, but I am not as we had a baby and I am home looking after she. We still had to borrow money from friends and family because unexpected situations happened, especially with this pandemic. My husband was furlough at some point for a few months before I had the baby and so on.
The idea is that I wanted to make a claim for a few months, but I don’t know how to start the claim, what to say. Claiming agencies doesn’t accept claims anymore because Amigo proposed that scheme, and I don’t know how to start one and if I can still make a claim with them or should I wait to see the vote results and make one after. Can you please give me some advices, I would very appreciate.
Thank you very much .
Sara (Debt Camel) says
You can’t make a claim at the moment. Well you can send in a complaint but Amigo will ignore it so there isn’t much point.
If the Scheme goes ahead, you and your husband can both put in a claim for unaffordable lending to Amigo.
If the Scheme doesn’t go ahead, you and your husband can both make the same claim to the administrators.
Can I ask how many other debts you and your husband have? Are you buying or renting? It sounds as though Amigo may not be your only problem?
Anna says
We are renting. At the moment we have a £5000
Amigo loan. We are paying for 2 years and still have almost £5000 to pay back. Actually we started with amigo in 2018 but we had a top up in 2019. I have another 3 credit cards in a total of £4800 and my husband a £2500 overdraft.
Sara (Debt Camel) says
ok so this Amigo loan is a very large part of your debt. That makes it worth trying to get this resolved through the claim process.
Anna says
Thank you for answering back Sara. Will try making a claim, waiting to see the voting results.
What if we want to pay the full balance to amigo, do they have to recalculate the interests and everything, as we paid 2 years only interests and a very small fraction from the credit. They are taking the first 2-3 years interests only for the 5 years loan I have with them. They said to my husband that if he wants to pay everything earlier I still have to pay the whole remaining balance. Why is that? If I refund earlier thy should recalculate everything and reduce the final amount with the interests they took in advance.
Sara (Debt Camel) says
Your balance is now nearly £5000
If you win your claim, the balance will be reduced a lot, possibly to zero if the first loan is also decided to have been unaffordable.
If you ask for a settlement amount now, Amigo have to tell you a settlemet amount. But that may be a lot more than you expect, because in the first couple of years of a high interest loan you are mostly paying interest off, so your capital still to pay will be very high.
It the repayments are more than you can afford, it may be better to ask Amigo for a lower amount or to stop paying until they have decided on your claim.
Perhaps ask Amigo what the settlement amount is? But you should not settle this until after the Scheme has started. Or you could lose a lot of money if your claim is upheld in the Scheme.
Anna says
True, I agree with you. I will definitely wait and see what is going to happen, and make a claim.
Thank you
Tom says
Hi Sara,
I just wanted to leave a message to say a huge thank you for all the work you do, and the support and advice you provide to everyone.
I have just received my payment from Amigo after their recent offer on my claim. Its been over 2 years since originally launching a complaint with them, and I never thought this day would come. Having paid off my loan 2 years ago, I today recieved a refund of £11,800…this is more money than I have ever seen in one go, and I have just become 100% debt free as a result, and this is the first time I have been debt free since I was 18…nearly 10 years of debt and worrying is finally over.
So thank you so much.
Sara (Debt Camel) says
Great news for you. A really clean start.
Pam says
That’s amazing news Tom!! Really pleased for you! I know how stressful it all is and glad there’s some resolution. I’ll keep nagging them until I get my refund. Will be glad when it’s all over. Take a big sigh of relief. :-)
A says
Amazing news Tom! Congratulations, you must be so relieved.
Hi Pam- Have you received your refund now?
Pam says
Hey,
Yes after emails and phone calls over the last couple of days I received the money about an hour ago!
For me; I was ‘scammed’ by someone who left me high and dry and I had to make all the payments myself. amigo have refunded all the payments I made back to me , and then have now put this back to the borrower. So I do feel in the end justice was done. I’m glad I didn’t give up.
Feel very silly for letting myself get in that situation; but you don’t think this will happen to you. You think you’re helping someone in need.
For anyone still waiting; keep pushing them!
Pam
Sara (Debt Camel) says
Very pleased for you!
Tom says
Great news Pam, I’m glad you got some of your money back. It’s a shame your ‘friend’ put you in that position. I also had a close friend as my guarantor, but I made sure I paid my amigo installment on time in full EVERY month without fail as I firstly didn’t want my friend to have to cover the cost, but also because I didn’t want to ruin our friendship. I paid amigo each time before I even paid my rent as for me rent was secondary in priority to Amigo.
Hopefully now we can move on after years of stress from having the loan, but also the 2 years and more that it took to make a complaint.
I have vowed to myself never to take another guarantor, payday loan, or high interest credit card again. I’ve learnt a lot, and will not make the same mistake again.
A says
Hi Pam,
That’s amazing news, so pleased for you. All the stress is finally over.
I’m still waiting for my redress to be paid after giving my bank details to them.
Hopefully I will receive this soon.
Tom says
Thank you! Yeah it’s such a relief. First time I’ve been debt free and I’m excited to see my credit rating improve which will hopefully allow me to get a mortgage one day!
simon says
Does this mornings Amigo share price crash mean anything? or is the outcome of the voting still unknown?
Sara (Debt Camel) says
Amigo has put out an announcement (https://polaris.brighterir.com/public/amigo_loans/news/rns/story/w0y128x) saying
1) the large majority of customers voting have voted yes
2) the FCA intends to attend the second court hearing and to oppose the Scheme.
“the FCA has decided that it intends to appear at the Court sanction hearing through counsel to oppose the sanction of the Scheme, even if approved by the requisite majority of the Scheme creditors, on the basis that the Court cannot be satisfied that the Scheme in its current form is fair. The FCA’s letter states that its concerns are in relation to Scheme creditors’ claims being significantly reduced whilst other stakeholders such as shareholders are not being asked to contribute, and the terms of the Scheme arrangements do not arise out of negotiations with Scheme creditors or any body representative of their interests. “
IainHL says
I’m surprised the voting is so heavily weighted in favour. I guess too many people were swayed by the “Vote for your money” slogan, and don’t research the true picture as presented here (and presumably elsewhere).
However, it’s good to see the FCA seems to have bared its teeth and intends opposing the scheme. I guess that will be what has caused the share price crash.
Yvonne Tranter says
I’m glad fos is finally opposing this scheme I for one have little faith that amigo will uphold the same percentage of claims that fos would
Arnold says
Hi Sara,
Could you please help me as I’m unsure of what to do. I was a guarantor for a ‘friends’ loan who ended up not paying it. In the end I worked 2 jobs to be able to pay this loan back in full and took out another loan with my own bank at a lower interest to clear the debt with Amigo. I have complained about this and have been approved over £10,000 back from Amigo but now they have gone to this scheme. I have no idea on how to vote or whether to vote at all…..please could you advise me on what I should do….I know i only have until 5pm tonight to decide
Thanks
Sara (Debt Camel) says
have been approved over £10,000 back from Amigo
Has Amigo agreed to this?
Thomas says
Hi Sara
I have seen a lot of information regarding the scheme if it were to go ahead that seems to say that the outcome of the scheme would be the same as if the company entered into insolvency. The reason I’m confused is that in my situation, where I have already paid the £3250 borrowed back in Jan of this year, I now have to pay £130 a month for the next 2 years which is purely interest. When the FOS uphold claims they make companies refund all of the interest that you have paid against your loan. So would the company shutting down not relinquish me from paying 2 years of interest payments? (subject to a claim upheld by the administrators)
It feels like in the scheme Amigo will reject all of its claims where customers still owe them £2000ish in interest. So in my situation it feels like the scheme not going ahead would be the best thing? But maybe I am missing something?
Thanks
Sara (Debt Camel) says
If Amigo goes into administration, you can make a claim to the administrators. If this is upheld, your balance will be cleared as you have already repaid more than you borrowed. If you have made payments in administration, these will be refunded in full. But you wouldn’t get any refund for payments made before administration.
It feels like in the scheme Amigo will reject all of its claims where customers still owe them £2000ish in interest.
I am worried about how many good claims will be rejected by Amigo as it has been very vague as to how it will decide claims. But I don’t think this just applies to claims where more than 2k is still owed.
in my situation it feels like the scheme not going ahead would be the best thing?
Possibly. It’s certainly not something to worry about. We will have to see what happens next week.
Sean Brooker says
Hi Sara
I know the creditors meeting is today, when will we know if Amigo did or didn’t win their vote?
Sean
Sara (Debt Camel) says
We know from an Amigo update yesterday https://polaris.brighterir.com/public/amigo_loans/news/rns/story/w0y128x that they will have “won the vote” because of the numbers of people who have already voted compared to the low number that will be attending the creditors meeting.
However that update also said that the FCA has decided to oppose the Scheme at the second court hearing, which will consider fairness issues next week.
The FCA published the letter yesterday: https://www.fca.org.uk/publication/correspondence/amigo-loans-proposed-scheme-fca-update.pdf. That says:
“The FCA considers that a fair compromise could have, but in this case has not been, proposed to Scheme Creditors to vote upon. Therefore, and in view of the particular concerns stated above, 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.”
So we will have to wait until the court hearing to see what will happen.
Sean Brooker says
So they have won meaning, we have to start the whole complaint process over again which will take months. The FCA won’t stop it happening, which mean Amigo can now drag it out even longer, the FOS cannot be involved and the customers are going to be ripped off. Because I have to keep repaying the loan, it’ll be paid off by the time they get it sorted and then I’ll get about 3% back. I wouldn’t mind but they won’t let me enter a lower payment plan, I’m now actually paying more then my agreed amount and basically as always…go straight to the threat of your guarantor.
Who on earth voted yes to this? And can we be sure it was a fair vote?
Sara (Debt Camel) says
Can you not explain to your guarantor why you need to stop paying?
Amigo told everyone who had a loan “Vote for your money”. The fact many of them will get nothing and the rest will get a tiny amount wasn’t properly explained…
Sean Brooker says
No it wasn’t, people will think they are getting full payouts it’s very misleading. Surely the campaign used needs addressing? It doesn’t mention anything about what or how you’ll be paid, how complaints will be dealt with, that the FOS can no longer be involved. It’s almost like they get to do as they please, I think redress will be 2-3% tops. Do you think the FCA will or could block the scheme?
And no I can’t, I won’t put him in that position, they are the most unhelpful company going.
I am shocked by just how many votes in favour they got! People just saw, vote for your money without realising they get next to nothing…and my not even have their complaint dealt with!
Sara (Debt Camel) says
I can’t really guess what will happen and the second court hearing or what the FCA may do.
Sandra says
Hi Sara I’ve had my complaint in since last july just obviously fos have sent the news about the scheme etc and said nothing really they can do, is there anything I can do my side as it’s the not knowing and don’t know where I stand the fos have went in my favour about the loan being unaffordable and sent amigo all what the needed but I’ve heard nothing at all from either side for a while now thanks
Sara (Debt Camel) says
I know, the delays really suck, especially for people with mental health problems.
From what you said before, your guarantor has been released and you have stopped paying?
There is nothing more you can do except wait and see if the Scheme goes ahead, and then put in a claim to the Scheme if it does, or to the administrators if it doesn’t.
Sandra says
Hi Sara yes my guarantor was released and I stopped paying just don’t know where I stand with it all.
Sara (Debt Camel) says
More will be clear about the Scheme in a week or so.
Peter says
Hi , with the amigo stuff going on , if the scheme doesn’t go ahead and the administration takes over , do you know what the time frames are for compliant to go through ? Or time frame if the scheme does go through , I’m tempted to stop paying as iv paid all my capital back now just feels like I’m throwing money away as I understand I won’t get anything back with either scenario , if I stop paying and don’t win my claim ( I feel like iv got a really good case but you never no ) will I end up in court or will they sort out a payment plan to pay back arrears ?
Sara (Debt Camel) says
If the Scheme goes ahead, the claims window will be open for 6 months. Then Amigo has to decide all the claims and let them go through the appeal process. It says it will pay out in the first half of 2022, I expect it to be towards the end of that half.
But an individual claim may have been decided much sooner. We don’t know how soon or what order Amigo will handle these. more than 75,000 people have voted on the Scheme so it must be expecting a lot more claims than that to handle. It may give open loans a priority but it hasn’t said this.
In administration, the administrators will normally take over the current IT systems, so this would include the page Amigo has planned for people to make claims etc. But the administrators will want to decide on the criteria to uphold claims. Again 6 months would be allowed for claims. But there should be a lot fewer of them as there will be no point in making a claim for settled loans unless someone’s credit record had been harmed and they want that corrected.
If you stop paying now, can you put the money aside you would have paid? So if the worst happens and you lose the claim. you have it sitting there to repay?
Will your guarantor also be making a claim?
Peter says
Thank you for the detailed answer appreciate your time . Yea that’s a good idea I may well do that , yes my guarantor will make a claim too I think we both have good claims .
Anthony says
Hi Sara,
I’m frankly astonished that 95% voted in favour of the scheme. Just on the amount of anger and frustration from Amigo’s customers alone I would have expected a larger protest vote. And that’s before you get into the actual rational economic choice which you have done an excellent job of explaining. There is a strong case to make that voting “no” was the better economic choice for many customers.
Generally speaking, large groups of people never vote so overwhelmingly for a single outcome. Even where the issue is non-controversial, to get 95% of 80,000 people to agree to even a simple proposal is highly unlikely. It seems to me to strain credulity that 19 out of 20 people agreed with this complex and highly debatable proposal.
I guess there is a lot to be said for the power of managing the voting process, framing the question and targeting the invites. Presumably Amigo have an independent reviewer validating the voting outcome, and ensuring everything was conducted properly.
Thanks for everything you are doing.
Anthony
Sandra says
Dear Sara,
Reading the comments on here has been really helpful and I was hoping to get your advice on my current situation.
I submitted a claim with the help of Resolver last year, June 2020. Amigo rejected my claim end of September 2020 saying I didn’t have a case saying that I was fully aware of what I was signing into etc. I counted argued if they did more thorough checks on my bank statements they would have seen lots of cash withdrawals (I have a gambling habit which I am still trying to deal with) I escalated it to FOS where it has been since. Although with the recent news it looks like all cases will be sent back to Amigo.
My loan was for £8000 over 60 months (this was my 4th top-up), so far I have made 25 repayments which amount to £7905.
It would have been more but I took out some “breathing space” which came into effect 1st November 2020. It should have been for 3 months but they kept extending monthly for about 3 months. This “breathing space” has now ended and payments will resume on the 26th of this month.
Reading comments on this forum from people who have stopped making payments and their guarantors released is a possibility for me and how do I go about doing this? Also, I don’t want to hurt my guarantor’s credit rating if I suddenly just stopped paying.
Please can you advise?
Thank you.
Sara (Debt Camel) says
We don’t yet know what is going to happen with Amigo’s proposed Scheme. The second court hearing is next week – things will be clearer after that.
In the Scheme you will be able to make a Claim (and the same in administration if Amigo go under.)
In general, anyone with 4 top-ups should have a good case for at least the later loans being upheld in the Scheme (or in administration).
As you have nearly paid the amount you borrowed on the last loan, then this should mean your balance is wiped and your guarantor released.
If previous loans are upheld you may also get a small amount of cashback – Amigo thinks 10% of the interest you paid, I think it may turn out to be less. But if not all your loans are upheld this may turn out to be even less as Amigo is applying a “deduction for unpaid interest” in this situation which is extremely unfair.
Can you afford to make the repayments?
If you stop paying now, your credit rating will be harmed, but it will then be repaired if you win your complaint.
If you stop paying your guarantor also has to cancel their direct debit and any continuous payment authority. This will not harm their credit rating as the Amigo loan does not appear on their credit record.
Amigo may send threatening texts/ emails but they have said that they will not start court action in the Scheme until your claim has been decided.
What was your guarantor’s financial position when the last top-up was taken, could they really have afforded to make all the payments to the Amigo loan themselves and still been able to pay their own debts, bills and living expenses? If they couldn’t, it will good if they too can make an affordability claim in the Scheme – that gives them two ways to be released as guarantor, if they will their claim or you win yours.
What is the rest of your financial situation like?
Sandra says
Hi Sara,
Thank you for the swift response it is much appreciated.
I can start paying back the loan this month as I have managed to get straight with rent and bills. I have managed to save a little by not having to pay Amigo the last 6 months.
Financially I earn more than my guarantor, he helped me with the loan due to him having a better credit rating. Depending on the outcome I will make sure he submits a claim.
Thank you again Sara for your help.
Sandra
Kayla says
Hello
Sara I hope you don’t mind me suggesting this.
I just wanted to suggest to Sandra if you wanted to stop gambling or for future reference. The chris Hill program, they run free online courses or you can request a booklet and do it yourself without the online course, it’s a really simple method without meetings etc. Also gamban has an app you pay a very small amount to each month which blocks gambling sites on your devices if ever you turned to online gambling. Thought it would be worth mentioning as it has helped me. Iv now been gamble free for 2 years and slowly paying back all my debt.
Sandra says
Hi Kayla,
Thank you for your advice and suggestions it’s helpful. I didn’t know about the Chris Hill programme I will have a look into that. I have registered with GamStop and have been to a few GA zoom meetings which have been a great help.
Thank you again, Kayla.
Sandra
Tom says
Hi Sandra,
Just chipping in with some first hand suggestions if that’s alright. I used to gamble a lot and there was a lot of evidence of this I’m my 6 years of bank statements I sent to FOS a while back. I have since stopped all gambling, and my bank offers a function to lock my card for anything gambling related which I have done just to stop the temptation. It can help for sure, and it’s always doable to kick the habit :) I used to spend money I couldn’t afford on it, but now I maybe get 1 lottery ticket a month, if that.
I wish you well:)
Sandra says
Hi Tom
Thank your for your kind message and advice. I actually have this in place as a member from a GA told me to do this straight away, like you said stops the temptation.
Thank you again.
Sandra
Emma says
Hi Sara,
I was looking for some help. I am guarantor on a loan for my mother in law (the borrower) which was taken in February 2020. The first months payment was made then we went into lockdown which affected her business/ working so she managed to get a payment holiday up until the end of the year. The loan is now in around £2000 of arrears and they keep contacting me to make payments.
The borrower has been in contact with amigo continuously to try and get a payment plan in place and she has never once said to them that she couldn’t make any payment as she has always tried to come to an arrangement with them. Following this I have received a letter from Amigo saying my direct debit has now been activated and they have taken the full payment of £395 from me on 22/03 and the 01/05 even though the borrower has agreed a payment plan with them and had paid £350 on 06/04.
Can you please advise if I should just cancel the direct debit to them as I don’t want it to affect my credit score in any way? I don’t feel any payment should of been taken from me as the borrower has always tried to come to a resolution with amigo but they always just phone me to make payments.
Thanks
Sara (Debt Camel) says
I don’t feel any payment should of been taken from me as the borrower has always tried to come to a resolution with amigo but they always just phone me to make payments.
Unfortunately that is what you agreed to when you became a guarantor. These loans are horrible – if things go wrong, they do not work in the way you might hope they would.
Do you think the loan repayments were affordable for you MiL when the loan was agreed – could she reasonably have afforded to make them and been able to pay all her other debts, bills and living expenses? If the answer is No, she should make a claim in the Amigo Scheme (if this approved next week, if not and Amigo goes under, she should make a claim in administration). You may need to have a frank conversation with her about this – many people took out an Amigo loan with their fingers crossed hoping things would improve for them.
Are the £395 a month payments affordable for you? Obviously you would rather not pay them, but can you pay them all if your MiL wasn’t paying anything and still been able to pay all your own debts, bills and expenses? If not, you too can make a claim in the scheme to be released as guarantor.
If you cancel your direct debit (also check with your bank if Amigo has a Continuous Payment Authority over your debit card or credit card – you also want to cancel that) it will not hurt your credit record – the Amigo loan does not appear on there.
Amigo may make threats of going to court for a CCJ, which would harm your credit record. But it has said that it will not do this in the Scheme until it has decided your claims in the Scheme.
Emma says
Thanks for your reply.
I don’t believe the loan was affordable to her in the first place so I will get her to make a complaint about it. If successful, could I then be removed as guarantor?
I am able to pay them and my bills but it just leaves me with no money for the month to live with. So ideally I don’t want to be having to pay this every month.
I have the email chain between my MiL and Amigo where she has given frisks of how much she can afford each month and they just don’t seem to be trying to work with her in anyway to resolve the situation.
Ok thanks, if I was to cancel the direct debit would I be advised in advance if they were going to try to take me to court for a CCJ and I could just reinstate the payments if I had to before it got to that? Or once I cancel and if my complaint got rejected, would I be taken to court for a CCJ and not given a chance to resolve before this?
Sorry for all the questions, I am saving for my first house and I just really don’t want this to affect my credit score in anyway.
Thanks
Sara (Debt Camel) says
I will get her to make a complaint about it. If successful, could I then be removed as guarantor?
Yes.
Also the interest is removed from the debt and she can make an arrangement o repay at a lower affordable rate, so she benefits too.
no money for the month to live with.
do you mean no money for food, toiletries, clothes, petrol, prescriptions etc? or no money to have fun on / save on?
would I be advised in advance if they were going to try to take me to court for a CCJ
yes. Taking someone to court is a slow process. they have to issue you with a Default Notice. Then they have to issue a Letter Before Action – if you reply to that after a few weeks asking for more information and time to take debt advice, they can’t start a court claim for another month.
If the worth happens and you lose the claim and the borrower loses the claim then you will have to start paying.
Donna says
Hi Sara,
Just receive this message from Amigo. What does this mean for my son.
I am writing to inform you that, following this your liability has been removed as guarantor.
As a result, all contact will be stopped and you will not be expected to make any payments towards the loan. Your payment details have been removed and any other details will be securely stored, for our records only. We will also remove any searches from your credit file regarding this loan.
I would also like to offer for the payments you have made towards the account to be refunded to you, I’ve included a breakdown of this below:
Payments to be refunded to you: £4,697.62
8% statutory interest awarded: £1,976.20
20% tax already deducted from 8%: £395.24
Total refund due: £6,278.58
You should be aware that if you accept the offer, we will add the capital element of your refund, totalling £4,697.62 , back to the outstanding balance for the borrower to pay. This will increase their outstanding balance. In making your decision whether to accept our offer, you may wish to consider the potential impact on the borrower. You are able to accept the offer of a refund and use any proceeds to help the borrower repay the capital. However, that is a decision for you. If you do wish to assist the borrower, then accepting the redress offer and using the proceeds to prepay the capital may be the optimal path for you both.
Sara (Debt Camel) says
Are you the guarantor and your son is the borrower?
Did you complain or did your son or both?
Donna says
I’m the guarantor and my son put in the complaint. He hasn’t received a breakdown of redress until I make my decision.
Sara (Debt Camel) says
OK, what should happen is that if you accept this, your son’s balance will changes:
1) the payments you made to the loan will be removed from the account (as they are being refunded to you). This will mean he owes more.
2) the interest charged to the account on the current loan will be will be removed. This will mean he owes less
3) if previous loans are being refunded, the interest he paid on thos loans will be deducted from the balance.
I can’t guess what the overall effect will be unless you know the details of all the loans and how much he has paid to each.
In general it is better for you to accept the offer and then you can choose to use some of your refund to help your son out if you want.
Also rejecting it will just delay everything as Amigo will have to go back and recaulate everything.
But the £4,697.62 you are being refunded – his account will not go up that much because of the interest deductions.