A whole book could be written about the different ways vulnerable customers can have problems with guarantor loans – I wrote about some of them in Guarantor loans – why guarantors & borrowers need extra protection. But here are a couple of very recent cases for illustration.
Case 1 – mental health problems
The borrower informed Amigo when he made an affordability complaint in September 2020 that he had major mental health issues, providing evidence from his doctor of a failed suicide attempt and gambling addiction. Since then, he thinks he called Customer Services more than a hundred times asking for a Final Response to his complaint, which should have been given in 8 weeks. In December he was informed that he would not get a response until at least March 2021 – presumably because of the proposed Scheme.
He said
“I simply cannot wait this long as 16 weeks has already deteriorated my mental health state and I am in hospital awaiting treatment from a psychiatrist. Please can this be escalated or can you please get someone to look again into this and issue my final response I’ve been waiting months for. I cannot take much more of this.”
Mental health problems by themselves are not a reason why a complaint should automatically be upheld. But they should have meant that his complaint was looked at promptly and sympathetically. Any responsible lender should ensure that their debt collection and customer service departments are alert for vulnerable customers, but despite the medical evidence and the extraordinary number of phone calls, either no-one looked at his case at all or they inexcusably didn’t realise this one required different handling.
When I tweeted about this case Amigo asked to be put in contact and they then rapidly decided to clear the balance owed.
Case 2 – financial abuse
A guarantor complained that she was coerced into taking out the loan by her partner. They split up and her ex stopped paying, she says in order to put more pressure on her. There was a police investigation into stalking, assault and harassment and he has been charged. She has had to take out a restraining order against him. All this was reported to Amigo.
Going through an Income and Expenditure statement showed Amigo that she has no disposable income with which to pay the Amigo loan. At first Amigo suggested she should just delay paying other people, but they then agreed she could not afford to pay anything. They then still persisted in threatening her with defaults and a CCJ, even though there was a complaint open with Amigo and then later with FOS.
She says:
“I think despite all the abuse and the fact they should never have [accepted me as] guarantor they are basically focussing on my finances and ability to pay it… Yet for me every time I have contact from Amigo it drags me back to where I was with my ex and it’s hard, it brings on nightmares and migraines and I dip mentally.”
Amigo also asked to be put in touch after I tweeted about this. Unfortunately so far there doesn’t seem to have been a resolution. EDIT – on 14 January Amigo agreed to release her as guarantor.
How ill vulnerable cases be handled in Amigo’s proposed Scheme?
31st March UPDATE Amigo has said that in the Scheme it may, at its discretion, make additional payments outside of the Scheme to customers it considers to be particularly vulnerable. This could be good – but at the moment we have no idea how often Amigo will decide to help people in this way.
Comments on this article are now closed.
Please join in the discussion on the more recent article: Amigo’s Scheme – how to vote & timetable for approval
Sean says
Hi sara
Do you believe this will come into affect, actually started my case in March and its been with the ombudsman’s for 5 months with no picking up my case, this would be a joke if this does happen? Also as I’m in a complaint should I still be paying obviously I don’t want to risk my guarantor
Sara (Debt Camel) says
Not a very funny joke, sorry, I have no idea what will happen.
On the numbers you gave before, if all your loans were upheld you would get the current loan wiped and several thousand pounds back. If the Scheme goes ahead in March or April say, you will have effectively thrown away the payments you make before then, as they just reduce your balance and increase the refund, which you are likely to only get pennies for.
What is your guarantor’s financial position? Could you explain this to them and say you want to stop paying but they then have to cancel their direct debit to Amigo? Sorry, there aren’t any easy decisions here.
Chris says
It was my understanding of the initial announcement that they would deal with complaints that had already gone to the FOS prior to their pie in the sky, scheme idea.
I understand there are a few cases that have gone to a higher level in FOS in terms of the way redress was worked out and returned to borrower and the interest debacle.
DAW says
Hi Sara,
My wife is disabled, has mental health issues and had ten separate loans with Amigo over the years starting way back. They know about this and we filled out the redress guarantor etc questionnaire and we were then told we should have an answer pre-Christmas. Then the announcement was made on the 21st and the rug was pulled out from underneath her. Although they say they are still processing complaints it’s just that they are not issuing redress refunds, this is in fact a lie as they clearly know the figures etc but refuse to forward them to the borrower. I’ve submitted a SARS to see if the information is held on the system at all or how far the complaint has got. I also had a complaint which took into account three loans including a current loan and this was completed in 14 days start to finish, including balance reduction.
This whole debacle has had a huge impact on both our mental health issues and my wife’s physical wellbeing has also been impacted which they have known since started the complaint back in September. The FOS have told us that it’s likely to be some months before they even allocate the case even although it was escalated on the eight week deadline. We are looking into small claims court action once the SARS has been received as I think it will be too late for FOS to do anything about it once they pick it up.
Sara (Debt Camel) says
Unfortunately if the scheme goes ahead a small claims case is barred. Also those cases are not fast, if the scheme doesn’t go ahead you are likely to get a response from FOS faster.
Do either of you have a current loan from Amigo?