In May Amigo’s proposed Scheme of Arrangement was rejected by the court. The FCA told the court the Scheme was not fair to customers, a more fair Scheme could be proposed and it didn’t think Amigo would go into administration immediately. The judge concluded by saying:
The FCA expects the directors to continue to explore and promote a restructuring which fairly allocates the benefits and losses among the various stakeholders. I agree with that, and would urge the directors to continue their efforts to promote a suitable restructuring.
Amigo said before the court hearing:
If the Scheme is not approved by the Court, then Amigo is highly likely to enter into administration.
But it has since softened this, saying:
Without a scheme, Amigo faces insolvency. [my bold]
So Amigo needs “a scheme“, but it doesn’t have to be the original Scheme – clearly the FCA was right!
What is happening to set up a new Scheme? There may be a lot going on behind the scenes, but there isn’t much in public, except the rather pointless survey Amigo sent customers last week.
Here are my thoughts on what needs to be done to come up with a “Scheme 2.0” as I will call it.
More money
This has to be the starting point.
The FCA pointed out how unfair it is that customers owed redress for unaffordable lending are the only people to take the pain in the original Scheme, despite the fact that if Amigo went into insolvency the customers would rank ahead of the shareholders who would get nothing.
A more fair Scheme would divide the pain more equitably. There will have to be more money for redress to be paid to customers and shareholders will get less.
This isn’t a minor tinkering. Amigo said customers may get back 10% of their true refunds in the rejected Scheme. That needs to be increased significantly to be fair.
Negotiations with customers?
The FCA pointed out that there had been no attempt to negotiate with customers who would be owed redress in a Scheme, to explain in detail what was being offered and why it was fair, or for customers to have access to professional advice.
These customers are creditors under a Scheme. I haven’t seen any sign that Amigo is trying to set up a “creditors’ committee” to look at Scheme 2.0. That seems surprising if Amigo wants to move rapidly on this.
A creditors’ committee isn’t essential for a Scheme to be approved. In the unlikely event that Amigo were to up the initial £15 million offered to £150 million, I would expect everyone to be happy without a committee to consider it.
But if Amigo is hoping to get a much smaller increase agreed, this could look more acceptable if Amigo has made an attempt to talk to customers and provided them with access to professional advice.
Hard to see how a survey can help!
Amigo says:
We have written to just over 140,000 customers during the week commencing 6 June 2021, via email. The reason for this was to increase our understanding from customers and is also in line with the request of the High Court Judge. Amigo wants to gauge the thoughts of our customers (past and present) on the ongoing situation, with the aim to help us improve our processes and communications moving forward.
But as the FCA has pointed out, Amigo failed to explain to customers that their real choice was not “this Scheme” or “administration then you get nothing” and that its customers are unlikely to have known much about different corporate restructuring options.
I think this was made worse when Amigo adopted the simplistic slogan “Vote For Your Money”, as this screenshot shows:
Unsurprisingly 95% of customers voted Yes, when presented with this.
Sending simple surveys out to customers can’t correct this level of misinformation or improve Amigo’s understanding of what its customers either understand or want.
When Amigo has previously offered customers a choice between Black or White, but the FCA says that Green would be better, then asking your customers why they chose Black or White doesn’t move you any further forward to deciding what shade of green should now be proposed.
What is the expected uphold rate?
The failure to explain that other options were possible was not the only problem with Amigo’s Scheme documents.
The documents were totally silent on the percentage of affordability claims Amigo expects to uphold in the Scheme. Amigo must have modeled what this number will be in order to justify its statement that it expected customers to get 10% of their refunds paid in the Scheme.
We know from Financial Ombudsman (FOS) statistics that they upheld 87% of Amigo complaints in the first half of 2020 and 88% in the second half – pretty consistent!
But see how this was reported and Amigo’s reaction to it on a news website last week:
Nine in 10 of the complaints resolved were upheld by the Financial Ombudsman.
Amigo claims, however, that the uphold rate for all complaints to the FOS is lower at around four in 10.
Where does that “four in 10” number come from? FOS does uphold roughly 4 in 10 of all complaints, but that is across everything, from PPI to pension investment complaints. It is hard to see how that is relevant to the Amigo situation.
But “four in 10” would explain why Amigo thought people may be paid 10% of their calculated redress, a figure which looked much too high if Amigo upholds cases in line with those FOS would.
If this is what Amigo is planning to do, it needs to be explained clearly to customers in the Scheme 2.0 documents. Because if it isn’t, customers who know they have a good affordability complaint may think they have a 9 in 10 chance of winning it, but actually Amigo will be turning down half of the complaints that FOS would have upheld.
This uphold rate is especially important for customers with current loans, who would be able to get these reduced or cleared if they win a claim in the Scheme or in administration. Administrators normally try to follow roughly what FOS would have decided, so if that would be to uphold a lot more claims than Amigo would in the Scheme, the FCA needs to consider if a Scheme can possibly be acceptable when it gives so many vulnerable customers a significantly worse result than administration.
FOS too needs to be told about the expected uphold rate as it may decide it was misinformed before, and would want to vote against Scheme 2.0.
Documents generally need to be made clearer for customers
There are other areas where the Scheme 2.0 documents need to be a lot clearer than the original ones.
Many customers with current loans may not have understood that they have exactly the same right to “set off” a redress refund against their current loan in a Scheme that they would in administration. This information was in the original Scheme documents, but it wasn’t prominent and the consequence that existing customers may gain little or nothing from a Scheme was not made clear.
Amigo is proposing to carry on applying its unfair “deduction for unpaid interest” where it upholds a top-up loan but not the previous loan. FOS does not do this, as I have explained in Amigo should end unpaid interest deductions. This deduction was not mentioned in the original Scheme documentation at all. Customers who had top-up loans need to understand that Amigo may deduct hundreds and in some cases thousands of pounds from their calculated redress because of this.
The Amigo director shareholdings were buried deep in the original Scheme documents. I think customers should be told more prominently that some directors stand to make millions if a Scheme is approved. There is nothing wrong with that, providing customers are fully aware of the facts when they vote on Scheme 2.0.
Remove pressure on people with current loans
The FCA has agreed to Amigo not assessing complaints at the moment and not paying out on FOS decisions. This leaves customers with current loans who have made a complaint in a highly unfair situation.
They have a potentially valid claim against Amigo but have no way to get this looked at now. But Amigo is continuing to put them under pressure to make their monthly payments, even when these are clearly unaffordable.
Amigo is threatening borrowers and guarantors with being taken to court – this aggressive debt collection is unreasonable, with many borrowers desperate to protect their guarantors.
Of course Amigo isn’t actually going to take people who have made complaints to court before the Scheme or during the Scheme. But customers don’t know that and feel very stressed at having to take this risk.
Amigo wanted to pause paying redress payments, but the FCA needs to insist that in exchange Amigo has to tell customers they can choose to reduce or pause repayments until their claims are considered and that their guarantor will not be asked to pay in this situation.
Additionally Scheme 2.0 should provide that if a borrower or a guarantor has their claim upheld, then they should be refunded in full all excess payments they have made since December 2020, not just since the start of Scheme 2.0.
UPDATE:
In December 2021, Amigo published details of the second Scheme.
See Amigo’s second Scheme for the latest news.
Sam says
Interesting to read as always thanks for the detailed write up.
My Complaint has been with the FoS since Aug last year. So ive been paying my monthly repayments each month to them as they did not want to listen when i suggested a pause in repayments until i recieve a verdict. So been ticking on as normal due to the pressure of defaulting or putting my guarantor in a awkward pressure.
The quicker i see the back of this company the better. I may actually be able to live a half decent life instead of being under constant stress.
Lorraine James says
I am also in that situation of having made more than one complaint, but I am still seeking employment so unable to make any payments even though the interest has more than exceeded the original and subsequent loans.
I just hope Amigo consider its Customers and the FOS uphold the pressure on Amigo to do so, or those that continue to struggle, as Sara has said, will still be in a difficult financial position throughout the pending resolution.
Tina says
Hi James, legally amigo can not charge you more than 50% in interest, if you have paid or been charged more than this, question them on it, and stand up to them if you feel you can, they are bullies, I did question them and I no longer have interest being added to my account, Instead they harras me, fit which I also called them out on and there’s less of it, contact them by email as this acts as evidence to your communication with them, you have to wait a couple of days for a reply but they have to uphold legal interest regulations!!!
John says
Good Morning Sara
I asked FOS to make a decision on my claim in December, I asked again when amigo lost in court. I received the unfortunate news they are awaiting Amigo’s new scheme on appeal
Sara (Debt Camel) says
do you have a current loan?
John says
Yes. I still have 8 payments left to make
Sara (Debt Camel) says
With only 8 payments to go, you will already have repaid more than the amount you borrowed.
If your claim is upheld in a new Scheme or in administration, the balance will be cleared. You may get some cash refund in a Scheme, but it will probably only be a small percentage of the payments you are making, so effectively you are wasting most of the money you are currently paying.
If you think you have a good claim, it would be better to stop paying now and tell Amigo you want your complaint considered before you will restart paying as you expect your balance to be cleared. This will harm your credit record but that will be cleared if you win your claim in the Scheme or administration.
You would also need to explain what you are doing to your guarantor and suggest they too cancel their direct debit to amigo and also phone up their bank to cancel the continuous payment authoirty over their debt card.
This will not harm your guarantor’s credit rating as the Amigo loan does not appear on there.
As the article above says, at the moment Amigo asks the guarantor to pay in this situation and also threatens both of you with being taken to court. But Amigo will not follow through and start a court case despite their emails and texts.
Martin says
This is shocking advice I thought you were supposed to be qualified. You seriously can not be advising someone to stop paying their loan because you have a hunch or because someone thinks they have a good claim.
Your guiding someone to do irreversible damage to their credit history which will leave them bigger problems for years to come.
Truly truly appalling advice.
Sara (Debt Camel) says
a) I did say it would harm their credit record
b) this is absolutely standard debt advice. See for example this page from StepChange about BrightHouse debts https://www.stepchange.org/brighthouse.aspx which says:
“If you have both an outstanding debt and a complaint with Brighthouse, you should stop paying the debt until the complaint is resolved. This is so that any redress they get can be offset against your outstanding debt.”
Martin says
If you have already received a decision on a claim and this hasn’t been paid then definitely withhold payments. However if you have made a claim but haven’t received a decision then you unfortunately have to keep paying. It is one of the most frustrating things with the FOS when a company is facing administration they just will not make a decision.
As annoying as it is (from previous experience) safer to keep paying because when that company becomes insolvent getting those bad credit scores removed from your credit record is hard work.
Sara (Debt Camel) says
if you have made a claim but haven’t received a decision then you unfortunately have to keep paying.
well that is your view…
But if the repayments are unaffordable, people cannot keep borrowing on elsewhere or getting behind with bills.
And many Amigo borrowers have poor credit ratings already.
And for Amigo guarantors, the debt doesn’t show on their credit record.
For a borrower who can make the payments and who has a good credit rating, then they have a difficult decision to make. They have to weigh up the chance of their claim not being upheld (when their credit rating would not get repaired) against throwing away a lot of the money (because they will only get a tine bit back in a Scheme).
when that company becomes insolvent getting those bad credit scores removed from your credit record is hard work.
It may not be quick but it does get resolved. Who did you have a bad experience with?
JAN says
Thank you Sara. Ive offered to postpone any redress & to simply ask that they take a fleeting moment or two to make a decision of my complaint. Amigo & FOS seem to think they should ignore making any decisions whilst the ‘bigger picture’ is resolved. People deserve to have their complaints processed regardless. Those decision makers could still be cracking on dealing with complaints. How can they hold anybody to so called ‘terms & conditions’ of an agreement/contract that is likely void as it was clearly unaffordable is reprehensible. I’ve actually not paid the last month & told them I will not pay another penny until my claim is dealt with. At the heart of this is the ‘borrower’ taking another beating whilst they seek to make sure the big creditors are looked after. Furthermore, there is zero chance of any redress at all when the vultures of administration descend upon an insolvency outcome. Any continuing payments by those of us with a strong affordability complaint still unresolved are likely to be throwing money away every month whilst this charade remains unresolved as insolvency is virtually a guarantee of zero redress. Carry on paying whilst we do not deal with your complaint for months & months on end is beyond unreasonable & unethical, the FOS have abandoned their duty to individuals imho there should be moratorium on further payments on all pending complaints unresolved. Apologies for ranting & thank you.
Sara (Debt Camel) says
I agree with a lot of what you say.
How can they hold anybody to so called ‘terms & conditions’ of an agreement/contract that is likely void as it was clearly unaffordable is reprehensible.
Exactly.
But to be clear, say Amigo goes into administration in a few month’s time. You will then be able to make a claim to the administrators in the same way that you could make a claim to the Scheme. Far from being vultures, administrators usually try to uphold roughly the same claims that FOS would.
If your claim is upheld, interest will be removed from the balance so you only repay what you borrowed. If this clears your balance you would not get any cash refund in addition EXCEPT any payments that you have made during the Scheme will be refunded in full.
If there is a balance left over, or if your claim is rejected, the administrators will try to sell the loan to a debt collector. That isn’t much to worry about – most debt collectors are a lot nicer to deal with than Amigo are.
Nathan says
I complained to Amigo who wiped my interest but still had to pay the high monthly repayments which has caused me to go in the red with other payments. I assume because I accepted their offer to wipe the interest I won’t receive anything from this scheme?
Sara (Debt Camel) says
Did Amigo agree your current loan was unaffordable?
Did you have previous loans and did Amigo say they too were unaffordable?
John C says
Im in a similar situation i had around 7k cleared off my account that left Me with 1k to pay but they will not budge on the amount paid a month.
Sara (Debt Camel) says
John C, can you too answer the questions I just asked Nathan?
John C says
Hi Sara, yes loans were deemed unaffordable, garuantor was refunded what they had paid on my behalf, and the redress offset against my outstanding loan.
Nathan says
Yes. They agreed my loan was unaffordable. I have finally finished paying the remaining loan this month.
Hugo says
All highly interesting I wonder what the nationality and religion of the directors happens to be.
Ms A Kennedy says
The directors nationality or religion is irrelevant.
Mike_p says
I’m not sure why that’s relevant, but if you look on the companies house website you can find the names and nationalities of the directors.
Gordon KENT says
Great Article , Thank You Sara
AA says
I looked at Amigo’s balance sheet and the bondholders should be called upon to shoulder some of the financial burden. Their coupons have been paid off the back of mis-sold loans so why should they be entitled to par repayment? Amigo has the ability to make redress payments but clearly not the willingness. The FCA needs to make sure any Scheme 2.0 includes a significant contribution from bondholders.
Sara (Debt Camel) says
It is an interesting ethical argument but that isn’t legally how things work.
More relevant though is that fact that some bondholders would not be repaid in full if Amigo went into administration, so asking them to contribute to the Scheme is reasonable.
Mal says
Why would the bondholders be interested in contributing ? They are first in line for their money when Amigo goes into administration. There are temporary waivers in place but the bondholders can accelerate things quickly.
Bondholders will get a good percentage of their money back so why contribute ?
Sara (Debt Camel) says
No doubt they would prefer not to, but the previous Scheme made customers take all the pain, whereas bondholders would have lost some money and shareholders would lose everything.
Customers with current loans will effectively get their right of insolvency set off before bondholders are paid in administration.
Mal says
Bondholders are first in the queue, we have seen this will all the payday loan administrations. Look at Piggy bank, loan book collected money to secured creditors then very low pence in the pound for the genuine victims.
Both sides came into the court case with guns blazing and now they have to work things out but the pain will be felt by genuine claims because they will not be handled until there is something acceptable for all parties and I think that will take a very long time personally.
But asking the bond holders can’t be relied upon.
Sara (Debt Camel) says
You will also have seen customers with redress claims upheld for an outstanding loan get insolvency set off in these administrations, even where there is a secured bondholder.
Time is a concern which is why the FCA should be intervening to protect the customers with existing loans from seeing their position worsen every month.
Mal says
I am very surprised that the FCA have allowed Amigo to freeze efforts on claims and paying redress for genuine claims. I think they know that Amigo is more at risk of administration than they declared during the case, otherwise why would the FCA allow this ? If the bondholders refuse then I guess there needs to be a placement of share to raise funds but until the FCA provide a figure then surely that can’t be done either.
Difficult position for claims and one that I don’t see will be resolved anytime soon. Amigo could continue to collect the loan book and nothing else happens because their isn’t really a way to resolve the current stand off. The FCA should have engaged with Amigo at the start of this, rather than last minute objection which has pushed both sides in a corner. Got my Moneyshop email today £330 from a £7k claim. Don’t want to see this again with Amigo but it’s a standoff.
Sara (Debt Camel) says
why would the FCA allow this?
I don’t know, you need to ask them.
until the FCA provide a figure
That isn’t how the UK regulatory system works.
Got my Moneyshop email today £330 from a £7k claim. Don’t want to see this again with Amigo but it’s a standoff.
The MoneyShop scheme is a good example of how customers were badly misled at the start with the promise of 80p in the £. At that point in 2019 my back of a fag packet calculation came to 5p, which was pretty close!
Tony Green says
Hi Sarah, I can understand that my interest payments should be reduced but why should I not paid back the money I borrowed? It’s Amigo’s money not mine….presumably they had to borrow it to pay me. Sounds like free money…fantastic, I wish I had borrowed more!
Sara (Debt Camel) says
I can understand that my interest payments should be reduced but why should I not paid back the money I borrowed
I never said you shouldn’t…
But if the complaint about your loan is upheld, interest is removed so you only have to repay what you borrowed, your guarantor is released and you can agree a genuinely affordable monthly repayment with Amigo. Amigo cannot insist that you carry on making the standard monthly repayments on the loan as it has accepted those were too high.
PS it seems more likely you are a shareholder than a customer. There is a limit to the number of these questions I can be bothered to answer, and that limit is fast approaching…
L says
You’re a saint, Sara. Such an obvious shareholder question.
Francis says
I am one of the many, who whilst I don’t want to see amigo go into administration. Would be better off if they did. My loan principle is paid back and there is no action on my complaint of a year ago.
I can’t help but feel somewhat cheated by what the directors of amigo are doing. Just keep taking the payments. If they are allowed to put dealing with complaints on hold then surely for people in my position. Payments should either be put on hold or guaranteed to be returned in full. Should I win my complaint. Which I am confidant I would do.
Janet says
It seems to me that Amigo are continuing to operate to form. Delaying admitting to their mistakes, playing for time while collecting more payments. They said that they would go into administration if the scheme wasn’t approved and many people who voted for the scheme would have done so on the basis of some money is better than no money. Surely there needs to be a time limit on how long they can take to bring forward a new scheme?
I am familiar with these delaying tactics. I complained to the FO about an elderly relative being tricked into becoming a guarantor that he couldn’t possibly afford. No checks at all on affordability had been done. Amigo delayed sending their evidence for several months. I stopped the direct debit and during this time Amigo (even though the case was being investigated by the FO) continually pressed for payment. They threatened legal action and passed our case over to a debt collection agency. Amigo didn’t even begin court proceedings and after nearly 12 months we did get a refund and removal of guarantor. The amount of pressure we were put under was immense but I knew we had a strong case and I am glad that I didn’t back down and resume payments. Stopping payments in the circumstances now seems even more justifiable.
Michelle says
I have been left with £3500 of that unpaid interest that I agree is ridiculously unfair , i made the decision this month to cancel all payments to them , they haven’t tried to contact me just yet but I’m sure they will , as I won my 1st and last loan complaint my guarantor has been released they keep putting late markers on my credit file and missed payments ( for 5 months now ) even though I had a payment plan in place for the unpaid interest. They hound me all the time to up my payments to the £342 I used to pay on the original loan agreement, I’m assuming if they go into administration or another scheme I can re complaint about that separately?
Sara (Debt Camel) says
They should not be adding late markers to your credit record if you had an affordability complaint upheld.
If they go into administration I would expect that you can make a claim for this unpaid interest amount and for your credit record to be repaired.
Des says
I absolutely agree with the write up and fully support it. When the survey was received I noted that the uncertainty is why I voted yes for the proposed scheme (if I had known more I would’ve vote NO). It’s not like they are having to redress all interest paid and then compensation of 49.9% apr from the initial date the Loan was given (calculated daily). Although it would be supported by all with valid claims I’d imagine!
You also stated “ Additionally Scheme 2.0 should provide that if a borrower or a guarantor has their claim upheld, then they should be refunded in full all excess payments they have made since December 2020, not just since the start of Scheme 2.0.” which I fully agree with, especially since Amigo have been manipulating creditors to carry on making payments with the threat of court, CCJ and guarantors being included, especially when an upheld complaint from the FOS has been given already prior the “pause”.
Louisa says
FOS recommended in Jan that Amigo uphold all 3 of my loans meaning Ive paid more than I borrowed with a small amount of redress due. Amigo offered to uphold the first 2 leaving me with around £3000 left to pay in *unpaid interest*. This was back in Feb/March.
I declined the offer on the basis I was earning less when they gave me the 3rd and largest loan than I was when they gave me the first 2 smaller loans, and they have ignored the complaint ever since. They’ve started chasing me for payment today but me and my guarantor will not be paying a penny whilst they sit on my complaint which they’ve already partially admitted to unaffordable lending on. Honestly not bothered about getting any money back, I just want the balance wiped. I simply can’t afford to make the £306 repayments when I’m only earning around £700-£800 a month.
Clare Smith says
I put my complaint in around October 2020. Not had a decision yet. I have had a covid payment break since January and I think then now want me to go back to paying. I’m still on furlough and cannot afford this. Any advice on what to do?
Sara (Debt Camel) says
Can you say something about the current loan – was it a top up? was it affordable at the point you took it out, that means could you pay Amigo and still pay all your other debts, bills and living expenses without getting further into debt?
How large was this loan and how much have you paid so far?
What about your guarantor – could they have a fforded to make all the payments when you took the loan out and still been able to make all their other payments? They may have been better off than you but that doesn’t necessarily mean that had a lot of spare money each month! What is their financial position now?
Clare Smith says
I suppose it was affordable by the skin of my teeth and yes it was a top up issued 11/08/2018 I had a balance of £2653 and got a top up of £5000 over 48 months and I have paid every month until January when I took a covid break. My balance is still £3735. My guarantor would have been able to make these payments and they are still working but doing less hours as they are 65 years old. I have a disabled child and my finances are much different now to what they was when I took the loan. They now want me to start paying again.
Sara (Debt Camel) says
when you got the top up was that because you were finding it hard to manage? Because that usually means the previous Amigo loan was unaffordable and the top up would be even worse…
Sara (Debt Camel) says
I can’t tell how good your claim is – I know a lot of people who were worried about this who when their bank accounts are looked really can’t afford a top-up loan. So it will be worth making a claim in a new Scheme or in administration.
So it sounds as though you have repaid more than you borrowed to this loan. If you stop paying, this will hurt your credit record (but you may not care about that as you can’t afford the payments!). If you win the claim the negative marks will be removed.
If your claim is later upheld in a new Scheme or in administration then the balance would probably be wiped – the “probably” is because in a Scheme if the top-up loan is upheld but the previous loan isn’t, then Amigo may deduct money “for unpaid interest” – this is much less likely to happen in administration so you may be one of the people who are more likely to be better off if a new Scheme doesn’t go ahead.
Given your guarantor’s age, Amigo should have asked whether they would be able to make the repayments for the lifetime of the loan – if they didn’t check this your guarantor may also have an affordability claim to be removed as guarantor.
If you have to stop paying – and if you can’t afford it, it can be disastrous to keep on paying and get behind with bills, these claims may take a long while to get sorted, it isn’t going to be a couple of months – then you should explan about making an affordabilty complaint to your guarantor. They can cancel their direct debit to Amigo and call their bank and cancel the continuous payment Authority Amigo has over their debit card.
If they don’t pay, this will not harm their credit record as the Amigo loan is not on there. If you win your complain or their win their complaint they will be released as guarantor, but if they have made any payments they will get little or nothing back.
If you don’t win your claim then your guarantor will then have to make an arragemnt to opay – this can be at a lower more affordable rate for them if they can’t afford the full amount.
Amigo may threaten to take you and your guarantor to court – they shouldn’t do this while there is a complaint outstanding. So if you do stop opatying it is important you send Amigo a complaint by emailing hello@amigoloans.co.uk with the subject AFFORDABILITY COMPLAINT. You can keep this email very short, just say you don’t think they properly checked your loan applications and you would like a reunds of interest and for your guarantor to be released. Amigo will not look into this .., but having a conmplaint in means they shouldn’t take you to court.
Natasha says
https://www.google.com/amp/s/www.thisismoney.co.uk/money/news/article-9690103/amp/Amigo-investors-vent-fury-City-watchdog.html
According to this article Amigo have complained to the treasury about the FCA’s handling of the situation and asking for it to be looked in to. Will this mean anything to the scheme or process?
Sara (Debt Camel) says
The full shareholder letter is here: https://www.uksa.org.uk/sites/default/files/2021-06/ASAG-Letter-FINAL.pdf
Will it have any effect? Who knows, there is some wild stuff in there such as the suggestion that 15% of profits over the next 4 years could add up to £60 million – the judge said in court that confidential evidence from Amigo suggested it would be “materially less” than £15 million.
I can see why shareholders are aggrieved that the FCA “changed its mind” but it always reserved the right to do this and the judgment noted (para 78) that the FCA letter was written after Amigo had confirmed on 30 April that they did not intend to change the contribution from shareholders to address the FCA’s concerns that the shareholders will retain the bulk of the benefits of the Scheme at the expense of the customers.
Francis says
Surely that’s the risk of investing. Nothing is guaranteed. The shareholders took the risk although no one yet knows what’s going to happen. You pays your money and takes your chance.
ruth says
hi sara,
I have now come to the end of my covid breathing space. I was another of the unanswered complaints from last year (submitted August 2020). I’m loathe to repay anything back until a scheme or administration is decided. I’m also expecting a baby before the end of the year and only get SMP so will have a severely reduced income…is there anything I can do to either delay or reduce payments? Thankyou
Sara (Debt Camel) says
So at the point you took the current loan out you think it was unaffordable – you could not repay it and still manage to pay your other debts, bills and living expenses without getting deeper into debt?
How large was this loan and how much have you paid to it so far? Did you have other loans from Amigo before this one?
Catherine says
Another message threatening court again. Catherine,
As there is no resolution in place, soon you may be issued with an LBA (Letter Before Action), this is a legal notice which will allow you to come to a resolution prior to a court claim being considered. However, if we can’t find a way to get your repayments back on track, we’ll assess your account for Court. In Court, an order for the full balance will be sought. A CCJ may be issued against you and Catherine, where it will stay on both of your Credit Files for up to 6 years.
If you’re in a position to do so, please arrange payment of the arrears. Call me on 01202 629103 or make a payment now Easypay: https://amigo.me/357JWH8K.
Chloe, Amigo Account Manager
Sara (Debt Camel) says
and as before they are saying you MAY be issued with an LBA. Not you WILL be issued with an LBA.
They cannot go to court until they have gone through the protected LBA procedure. They haven’t even started this yet. I will be suprised if they do – no one with an active complaint has had one of these so far as I know since the Scheme was first proposed in December and they were very rare before that. Come back if you get one…
K says
Hi. Am I still able to put my complaint into Amigo? I didn’t really understand all about it until I started reading all the comments on here.
Sara (Debt Camel) says
do you have a current loan? if yes, are you struggling to make the payments?
Chris says
Hi Sara,
I have a complaint with amigo which was submitted in February. When taking out the loan my monthly income that I told them was based on the fact I regularly got £500-£600 in overtime every month. As they did not ask to see any wage slips they wouldn’t be aware that this was not a guaranteed income. Because of covid I no longer get this overtime and the payments have become a real struggle. I continue to pay them as I cannot let my dad make the payments. Other Debts have increased because of this. There are other factors of my complaint such as the fact I am on a debt management plan and was when I took the loan out. In your opinion, do you believe this is good grounds for a complaint and if so should I ‘pause’ making payments until a decision has been made on my complaint? I am aware my dad would also have to contact his bank to stop any payments being deducted from his card too.
Thanks
Chris
Sara (Debt Camel) says
was this your first loan from them? When did you take it out, how much have you paid to it so far and what is the current balance?
When you took the loan, could your dad have afforded to have made all the payments himself and still paid his own debts, bills and living expenses? I am asking as he too may have good cause to complain and ask to be removed as guarantor.
Francis says
Hi Sara
I just read this article in the press.
https://www.independent.co.uk/business/lender-extends-lifeline-to-struggling-amigo-loans-b1872603.html
I just wanted to get your thoughts on this. And ask how long in reality can the bank keep extending its credit facility. Without a plan in place. Amigo has done very little from what I can tell, since the court decision to reject the scheme.
Sara (Debt Camel) says
Amigo borrows money to lend by selling bonds. This announcement relates to bonds where Amigo has provided extra security so the repayments of some Amigo loan repayments are effectively kept to repay the bonds. As a form of protection bondholders have the right to demand their bonds are repaid if certain things happen, called acts of default. The bondholders had previously agreed to Amigo having a “grace period” during which they would not take action which expired today. The announcement is that the bondholders have now agreed to a 3 month extension to this grace period.
The bondholders would prefer a new Scheme similar to the last one to be agreed as that way they would get 100% of their money repaid, so the extension can be seen as giving time for this to happen.
There will be an end date when the bonds have to be repaid, but that isn’t for years. I don’t see why the bondholders could not extend as long as they want up to that point, they are just choosing not to take some action, they don’t have to do it if they don’t want to, but Amigo wants a written assurance that they don’t intend to declare a default.
We don’t know what is happening behind the scenes. All that is visible is the surveys that Amigo has sent to many customers and the way it is aggressively pursuing people with a current loan who have made a complaint.
Francis says
Thanks Sara
I to took that survey you mention, although very short it was. There must be some things happening in the background. I noted in the article however that they had their credit slashed from 250 to 100 million. So also some concerns from their lenders also. I am about to miss my first payment. I have informed amigo of my intention and my reasoning behind this. And so the letters text and emails should start arriving soon. I have one question though regarding this. Can I stop amigo from putting any negative remarks on my credit file because of my complaint being on hold.
Sara (Debt Camel) says
they had their credit slashed from 250 to 100 million
That is because they don’t need the credit as they are not lending. Of course it will be interesting to see at what rate they will be able to raise money to lend in the future if a new Scheme gets going.
Can I stop amigo from putting any negative remarks on my credit file because of my complaint being on hold.
As a borrower you can’t. But the negative marks will be removed if you win your complaint in a Scheme or in administration if Amigo goes under. You have to weigh up the chance of your complaint being upheld so you will have effectively thrown away much of the money if you continue paying against the chance of you losing the complaint and having to live with the negative credit marker if you have stopped paying.
Francis Kearney says
Hi Sara
It is a no brainer for me, I have decided with the support of my guarantor , amigo will not receive another penny. And I will face whatever happens with my file as and when
Thanks for all your great advice
Jean says
Hi everyone
Just spent over an hour reading this article and comments, very interesting read and to be honest left me still feeling down about it all.
My story is to long but I have 2 payments left (after 4 long years) and my complaint has been with the FOS for 11 months. I even complained to FOS about how they have dealt with it all and got nothing back. I’m more disappointed in the FOS for just putting us all to the side letting us carry on with the unaffordable loans, and putting us in a position we know nothing about.
I didn’t vote for the scheme because I didn’t understand it fully because it didn’t seem very fair, of which I can see from the article I was right.
If I’m honest I just want to finish paying and see the back of all of it and never get into this position again. Xx
Catherine says
Im actually fuming with these now!! I emailed them Friday to stop threatening me with this and they emailed back saying they’d stop. Now I’ve got this!!
As we get closer to your case being issued with an LBA (Letter Before Action), I will continue sending information relevant to both you and Catherine. If CCJs are issued and the orders aren’t kept to, a charge could be applied for on Catherine’s home. If they were to sell or remortgage their home before the debt is cleared, any proceeds would go to clearing what is still owed.
If you’re in a position to do so, please call me to discuss your case.
Sara (Debt Camel) says
A combination of aggressive and confused isn’t good is it :(
You could think about sending the FCA an email saying how they need to stop Amigo behaving like this.
Catherine says
I saw your previous reply to somebody else and have already sent a email. I’m absolutely disgusted by them and what they are doing. It infuriates me that they are hounding people for money when it’s them that owe us. I’ve got £6000 left to pay after already paying around £15000 off a £10000 loan. I know I’ve got a good case. They upheld my first 2 loans but not my last 2 and offered my £3900. I turned it down and sent it to the FO they’ve had it since august. I’m not paying anymore cause when/if I win my case I won’t get any of that money back. I just hope they got insolvent tbh cause I’ve lost hope of actually getting any money back from them when it should have been around £15000 if not more.
Clare Smith says
That’s what I’m doing. They are not getting a penny more from me, at least while they are sitting on my complaint.
Linda says
Hi can you not put in a claim now to amigo , I was guarantor for my daughter we both got ccj this is now paid I had credit card debt bank loan and numerous payday loans and thankyou to you I have received redress’s I would just like ccj removed from my credit file thankyou for any advice
Sara (Debt Camel) says
how long ago were the CCJs?
Did Amigo uphold your complaint or did it have to go to FIS?
Whose complaint was upheld, yours or your daughter’s?
Linda says
Hi I haven’t complained I meant redress from payday loans sorry not amigo
roughly 6 years ago I’m not sure finished ccj around 4-5 years ago
Linda says
Hi I haven’t complained sorry meant I’d received redress payday loan not amigo not sure how long ago ccj 8 years probably paid off roughly 4-5 years ago
danielle says
Hi Sara, I hope your well
Im recently new to this so forgive any mistakes,,, I recently emailed amigo regarding whether I had outstanding complaint throgh the scheme and they replied saying they couldn’t locate any complaint but if I wish to i can reply to the email with my complaint or complain through other channels so I replied with affordability complaint as I don’t currently have any outstanding amigo loans anymore but I have had multiple loans going way back to 2007 I beleive I will list my agreements on a new post as won’t have room there’s 7 on total going upto Nov 2019 where I repaid the final payment (finally),,,but I’ve read online etc that thier not taking new complaints etc so I just wondered whether I will receive an update as to uphelding or not before thier 8 weeks is up as they sent a reply to my complaint including a copy of thier complaints procedure and stating they are busy with claims as I asked for my complaint to investigated on a priority basis as last year I was illegally evicted during the eviction ban so currently homeless with X4 children and I explained that if my claim was to be upheld how Detrimental effect it could have on my situation at the moment regards to bonds deposits restarting again with nothing as all my contents was disposed of also… Anyway I’m more worried that thier gonna just let thier 8 weeks pass and then decide to email as thier response and say all claims / complaints are on hold.
danielle says
Hers a list of my loan agreements
38596891 – created 26/10/2017 / £4,500
28390717 – created 05/04/2016 / £5,000
16529131 – created 09/06/2014 / £5,000
10206861 – created 06/12/2012 / £5,000
WST5761104 – created 25/03/2011 / £5,000
WST1788198 – created 09/04/2009 / £5,000
EXS414408 – created 03/01/2008 / £3,300
I’ve fully settled the last loan in November 2019 (Finally)
And after I sent the complaint asking them to prioritie if possible they replied and said..
danielle says
They replied and said after I asked them to prioritise and investigate whether to uphold or not….
Dear Danielle,
Agreement number: 38596891
Thank you for your email, I’m sorry to hear you’re unhappy with your loan.
I am writing to you in regards to a complaint that was raised for you so that we can investigate the matters brought to our attention.
We will be issuing a written response to your complaint, following our investigation.
Our guidelines allow us 8 weeks in which to respond to you. As we’re currently trying to help lots of customers, please don’t worry if you don’t receive a reply from us before the 8 weeks is up, we will keep you posted with the progress of your complaint and when you can expect to receive a reply from us.
I have included a copy of our complaints procedure, for your information.
I am sorry to read that you are suffering with stress and your mental health, is this something which you have been to your doctors to get support for? Also do you wish to discuss with us? If so please let us know so we can see what steps we can take to accommodate.
In the meantime if you need to contact us or have any further concerns please do not
hesitate to call us on 01202 835170 or email complaints@amigoloans.co.uk and we would be happy to help.
Kind Regards
Customer Relations Team
Amigo Loans
Sara (Debt Camel) says
I am afraid this is bad news about your Amigo complaint. At the moment Amigo are not looking at any complaints at all. You are unlikely to receive anything at the end of 8 weeks and can no longer send your complaint to the ombudsman.
Amigo are trying to put together a new Scheme to handle complaints – their first attempt was rejected in court in May.
If they succeed, you can make a claim to the Scheme. It is unlikely that any money would be distributed for more than a year, and it is also likely to be a lot less than the “proper” refund you should have received which would have been all the interest repaid on those of your loans that Amigo decided were unaffordable. Amigo’s first Scheme only planned to pay people about 10% of the proper refund.
I am very sorry to hear about your current situation. I hope you are getting help from your local authority to be rehoused?
Lee says
I’ve resigned myself to clearing my remaining balance (less than a year to go now) and getting shot of them once and for all. I made a customer service complaint which they’ve partially upheld , can’t even be bothered contesting that so accepted a measly amount as an apology. At least they responded to it within 8 weeks!
Good luck to everyone who has outstanding complaints, Sara thanks so much for all your support
Francis says
Hi Sara
After receiving an e mail from the ombudsman, saying they not taking my complaint any further for the time being. Prob indefinitely is my take on it.
Amigo seem to be able to just carry collecting payments from all those miss sold loans. This just does not feel right. I have stopped paying amigo and hope they take me to court now.
Which is what I think they might do given the fos e mail. Has in all likelihood cleared the way for them to do just that. I might be wrong. However i just get that uneasy feeling.
Who is going to sort this mess out for the people if not the fos
Sara (Debt Camel) says
I have quoted you in this article I have just written:
https://debtcamel.co.uk/stop-paying-amigo-pros-and-cons/
That says why I don’t think Amigo is going to be taking anyone to court – these seem just empty threats, they haven’t been doing this for over a year.
Michelle says
Good morning ,
So I had loans 1 and 3 upheld by amigo and loan 2 they decided to not uphold , I’m being charged this unfair interest £3350. But looking at my letter they sent with their workings out , they said I could afford loan 2 based on a £75 a month minimum payment , my chart just above in the this letter clearly shows minimum payment in loan 2 was £195 , I called to inform them they had work my affordability out on the wrong minimum Payment ( £75 was payment for loan 1 ) they just said it was a typo I’m assuming there is nothing I can do about this now iv accepted the redress ?
Sara (Debt Camel) says
how long ago was this offer which you accepted?
would the second loan have been unaffordable at £195 a month?
Michelle says
It was in December, iv only just noticed it as was reading letter again to try and work out how I still owe so much unpaid interest on a loan that was for only £4000 in the first place , yes absolutely all the loans were unaffordable, I was just so glad to get any offer just before they stopped handling complaints, I accepted it otherwise I’d still be stuck paying £345 a month while they sort their mess out
Michelle says
Sorry meant no I couldn’t afford it all the loans in my eyes were unaffordable
L says
Is this a joke? 8 people to be “the voice” of Amigo… we know they’ll pick people that best suit them. If they pick anyone aggrieved – which is most people – they’d simply say pay full compensation, or go bust!
I assume everyone got the email.
Sara (Debt Camel) says
I guess they are sending them in batches.
L says
This is the bulk of it, if anyone didn’t get it…
What is a Customer Committee?
We will select 8 people at random to form a collaborative ‘voice’ of our customers. The selected individuals will provide a representative customer opinion on Amigo’s potential options; including the possibility of a new scheme.
A new scheme would define how (and when) we pay customers any valid compensation for loans which were mis-sold, for example due to affordability reasons. We would like your voice to be heard as there are alternative options, which include not doing a new scheme and Amigo filing for insolvency.
We would like to have a mix of customers; past and present borrowers and guarantors, to be a part of the committee. The Financial Ombudsman will also be invited to attend, as the largest creditor of Amigo.
Sara (Debt Camel) says
Yes. the timetable is people can put their name forward until July 27. Then there will be 5 committee meetings of about an hour held over about a month.
It seems unlikely with this that any second scheme can possibly start before end October and that will be really pushing it.
Amigo is dragging this out – every month more people make debt repayments when they will get back very little of that money in a new Scheme :(
L says
Yeah, it’s terrible. Although I’m 12k short of what the ombudsman told them to pay me, I’m glad to be rid of their hounding harassment. Though, I still keep an eye. I wonder what they could do if everyone just stopped paying? I’ve seen many have.
After the ombudsman upheld all my loans, it was like talking to a brick wall telling them they couldn’t threaten me anymore. They’re like nothing I’ve ever known.
Anne-Marie says
Hi Sara,
I received a” notice of sum of arrears” from Amigo but my account is up to date . When I call that is what i am told.
Initially payment was direct debit on the 3rd of the month.
During their cv-19 breathing space I was still paying £50 PCM but by card as the DD was cancelled ( by Amigo) rather than my £181.00 when the breathing space ended in April I resumed paying 181.00 every 4 weeks reflecting my new wages structure. All new payments are by card Amigo explained this is because they could not reset the direct debit for the 3rd of the month ( it also suits my 4 weekly payment structure)
This was all organised over the phone back in March-April with an advisor.
The notice was issued 04.08.21 despite the account being up to date and new payment arrangement in place for 5 months.
Its also on the back of a complaint about a similar letter which cost amigo £35.00.
What can I do?
Sara (Debt Camel) says
Complain again and ask for another £35?
You have said before that you have complained and that the payments are unaffordable. Have you looked at the pros and cons of stopping paying? See https://debtcamel.co.uk/stop-paying-amigo-pros-and-cons/
Anne-Marie says
Ive sent an email complaint.
With regards to stopping payment I only have 3 left to make and would rather get rid of my loan and Amigo.
The fact im getting such a letter despite being up to date and Amigo accepting the new payment 5 months ago is concerning how many others are they doing this too. Despite claiming to be assisting !
Sara (Debt Camel) says
They are a nightmare to deal with. One poor person has repaid the her loan last year and cancelled her DD but TWICE this year they have reinstated it and taken a payment. Once in Jan. One last month. She can get the money back from her bank under the DD guarantee but the last one meant she missed a payment to car finance…. The combination of aggressive and incompetent is a disaster.
Anne-Marie Kennedy says
Hi Sara,
Amigo responded today confirming my account is up to date Amigo state the letter is a legal requirement from FCA… is that correct ? I’d have thought if it is a legal requirement the contents should be up accurate?
They also informed me the FCA have suspended all complaints.
I got the impression this meant i “tongue out , you cant complain”
Regards
Sara (Debt Camel) says
So there are still arrears? Then they have to send out a NOSIA letter even if you are up to date on a repayment plan. If it is that sort of letter, I don’t know why they gave £35 back before…
Nazia Bibi says
Hi sara just a quick question are Amigos going into administration as ive seen a article this morning ?
Sara (Debt Camel) says
was this the Telegraph article yesterday?
Nazia Bibi says
Hi sara
Yes it was the telegraph article and its also on Google news
Sara (Debt Camel) says
ok, it has been posted above,
I don’t think there is anything new there. Someone asked me if there was any news and I gave my summary of what had happened in the last month.
Are you currently paying Amigo?
Nazia Bibi says
Hi sara
No i stopped the payments a couple of months ago although they did send me a letter before action about 2 months ago then i complained to the fca they still investigating my complaint
Ruth says
Just seen this Sara
https://www.sharesmagazine.co.uk/news/market/LSE20210824181048_4088954/Final-Results
Sara (Debt Camel) says
Yes, Amigo’s much delayed annual results are out. As expected they are losing money as they aren’t lending at the moment.
There is almost nothing in there about what the second Scheme might look like or timescales.
Jamil says
Hi Sara, in some recent correspondence I posed the question directly to them about when the overdue & long awaited next scheme of arrangement could be expected & the response was October. I have a complaint with the FCA now too thanks to your previous great article about paying/not paying Amigo. Thank you. p.s. I did also email you recently.
Sara (Debt Camel) says
I think October would have to be the date for proposing the Scheme – it will take at least 6 weeks more likely 8 from when Scheme is announced to get it through 2 court hearings and a period for voting in between. Hard to see how that could be done by end October.
Peric says
I am a Gurrantor,
The lender took the loan (from Amigo) in August 2019
He still owe them 19 instalments. (Should have only be 12 by now) yet they gave him another extension (he missed his August payment) till the end of September. I m still receiving txts from them about having to pay if he fails to
I really don t know why they are doing this. He is literally late on all of his payments since September 2019 and he got a 6 month repayment break during the pandemic.
Are they really that soft?
Sara (Debt Camel) says
Why not suggest to the borrower that if the loan was unaffordable he can make a complaint? The good news for you is if he wins the complaint then you are released as guarantor.
Peric says
I have, ut for some reason he is not doing it. Also I think they have removed the fees and he only pays back the money he borrowed.
Sara (Debt Camel) says
really? That usually means that he has won an affordability complaint… in which case you should have been released.
Kamil says
Hi Sara,
I have a question.
I have made my complaint over a year ago. I had 3 complaints in total. Its took a while for Fos to start dealing with them (because of the pandemy) but when finally they started I had my 2 complaints solved very quick.
Obviously amigo case is upheld due to their situation however Fos has sent them a letter asking to remove all the Interest from all the loans that I had in the past and from the current loan. They suppose to answer to this letter within 4 weeks (should be april this year) but they never did. What that letter from Fos should mean to me?
Do I have a complaint won or not?
Sara (Debt Camel) says
It sounds as though you had a FOS adjudicator decision – this isn’t legally binding and Amigo has to accept ti. normally as they ignored it FOS would then go on and make a final decision from “an ombudsman”, but that isn’t happening because Amigo has stopped handling complaints.
Are you having difficulty paying this loan? Have you talked to your guarantor about this?
Kamil says
I dont as I stopped paying them 2 months ago. From my calculation they own me around 4k…
They obviously still chasing me to pay.
I have contacted Fos but its look like they ignoring me.
They told me they cant do nothing until amigo approve new scheme.
My guarantor is currently on IVA and we managed few months ago to take out, so is no guarantor on the loan.
Sara (Debt Camel) says
what is the rest of your current financial situation like? do you have other problem debts?
Kamil says
Hi Sara
I had problem with gambling and sum of my debs in total was around 25k. Actually I have everything clear as I went onto DMP and that helped me a lot.
Only what is holding me now is Amigo.
Regards
Rose says
Amigo loans issued a default notice for 433.50 in June and it states in the notice that if that amount was paid that iy would satisfy the notice..the amount was paid before the notice expired..payment is due the end of each month and before August payment the account was fully up to date..on the end of August i made a payment of 30 as couldn’t afford the full payment but that’s because i know that ig i make a payment before 7 days of the payment being issued then you wont get a late payment marker on your credit file because it’s not a full month in arrears..today i received an email and text threatening me with issuing a default notice again..how is that possible..they seem to be getting even more aggressive regarding collection..i wasn’t aware that you could get issued more than one default notice..
Sara (Debt Camel) says
Hopefully we will hear something soon!
I am turning comments off here. Please leave them on the latest Amigo news page: https://debtcamel.co.uk/amigo-new-scheme-2/