UPDATE
In December Amigo published details of its new second Scheme. From March 2022 you can now vote on this – see Amigo’s New Scheme – which way should you vote.
This contained details of a Trust Account that was set up.
If you have made a complaint, your payments from now on will be kept in this Trust Account. They will then be repaid in full (not at 41p in the £) if your complaint is upheld by the Scheme and you are owed cash redress.
This means you will not lose money by continuing to pay Amigo IF you have already made a complaint.
Not complained yet? Send Amigo a very short email to hello@amigoloans.co.uk with COMPLAINT as the subject. Just say you want to make an affordability complaint about your Amigo loans (a guarantor can complain the loan was unaffordable for them or for the borrower – or both!)
Amigo is NOT going to investigate this complaint, so don’t worry about the wording – the only reason to send this is to make sure your payments from now on go into the Trust Account.
If you can afford the repayments, you no longer need to worry that you will lose money by making them if you have made a complaint.
But if you can’t afford the repayments and are desperate to stop – it will be a long while before your complaint is looked at in the Scheme – then you may still want to see if Amigo will let you have the right of equitable set off as described in this article.
If Amigo says no, you need to look at whether you should stop paying Amigo anyway.
In September some customers were told they can stop paying Amigo while their complaint is outstanding, through Equitable Set Off. This isn’t settling their complaint, it is just putting the payments on hold until the claim is considered in the Scheme.
This is what I have been saying Amigo should do since last December when they announced their first, now rejected, Scheme of Arrangement.
Amigo are trying to set up a second Scheme. But until now they have been insisting that people who have made a complaint have to keep repaying their loan, even though Amigo is refunding to consider their complaints until a Scheme is approved.
Equitable Set Off is a term that most people won’t know. So let’s look at what is being proposed and whether it will be good for you. And why has Amigo delayed doing this for so long?
Contents
What is Equitable Set Off?
Here is an example of Set Off:
If you owe someone £500 and they owe you £300, then they can’t insist you pay them £500 because the two debts can be set off against each other resulting in you only owe them £200.
This can be applied to a disputed loan, when you have made an affordability complaint. You owe the lender the current balance of the loan, that was the contract you agreed to. But if your complaint is upheld, the lender will owe you an interest refund. This refund could be larger than your current balance, so they owe you a cash refund. Or it could be smaller, so your balance will be reduced.
There are various types of Set Off, see this legal blog on Cross-contract set-off. But the differences don’t matter here – Amigo is saying you have the right of Equitable Set Off, so you just need to know what the implications for you are.
How Amigo is saying this will work
The readers who have asked Amigo about this have been sent an email saying Set Off is available and a further email with details if they asked about this.
Here are some extracts from the Amigo emails, in italics, with my comments on it.
“In the previous contact we have received from you, you have queried about the option to not make payments to your current Amigo loan, whilst your complaint remains outstanding. We’d like to confirm that this process, Equitable Set-Off, is now available for eligible customers, if they wish.”
So far as I can tell, Amigo is not telling all people with a current loan about this, just those who have recently asked about stopping paying and who have made a complaint.
I think everyone who has made a complaint and owes a balance, borrowers and guarantors, should be eligible. But from readers’ comments below this article it seems that Amigo will only let you exercise your legal right if you have paid more than the amount you borrowed on the current loan, ignoring previous loans. I don’t think that is right, but you can’t make them change their mind. If they say No you are not eligible, then your choices are the same as they were before – carry on paying or talk to your guarantor about stopping paying – see the pros and cons in this other article.
“By exercising your right to for Equitable Set-Off, you agree:
That you will not be making any payments to your loan, due to your ongoing complaint. You believe that you will have a redress payment that you can set off in the future, against your Amigo loan balance”.
You need to have made a complaint. If you have delayed doing this as there seems no point until a second Scheme is approved, you should make a complaint now and also ask for Set Off.
You can keep your complaint very short as it won’t be looked at now. See affordability complaints about guarantor loans for what an affordability complaint is to give you a feel for whether you should complain.
“That Amigo will not be expecting payments from either you or your guarantor, if you agree to this.”
For many people this will be the most important point. Amigo will be stopping sending threatening emails and texts to you and your guarantor saying you will be taken to court if you don’t pay.
“That payments on your account will continue to fall due, and the account fall into arrears.”
This is standard for affordability complaints about other kinds of credit – when you stop paying arrears accrue. Amigo has a price cap policy, so the total amount of interest that can be added can’t exceed the amount stated when you took out the loan.
“That negative information may be reported to your credit file.”
This too is standard for affordability complaints about other kinds of credit. One important point for this Set Off is Amigo is saying they will not ask your guarantor to pay, so their credit score cannot be harmed as the loan doesn’t appear on their credit record.
“That contact will be minimised to you and your guarantor, however, you will still receive certain important communications.”
Lenders are legally obliged to send some warning letters about arrears known as NOSIA letters. There won’t be many of them.
“That any future complaint or Scheme outcome isn’t guaranteed, and that if a complaint isn’t upheld, that any outstanding balance and arrears would be payable.”
If you stop paying, you are taking a risk that your complaint won’t be upheld.
“Can I have this if I have already stopped paying?”
I can’t see why not.
If you and your guarantor have been getting texts and emails pushing you to pay, perhaps threatening court, then these should stop if you tell Amigo you want this right of Set Off.
When you have already stopped paying, I can’t think of any possible downsides in telling Amigo you want this Set Off.
“So far I have been paying – is this a good idea for me?”
You need to think about two main points.
First, whether your complaint will be upheld.
We know Amigo failed to make good checks on a very large number of loans. But what would proper checks have shown?
Guarantor loans are aimed at people with bad credit, but a loan still has to be “affordable” – so you can repay it and also pay all your other debts, bills and living expenses.
Ask yourself if Amigo had actually looked at your credit record carefully and your recent bank statements at the time you took the loan, what would they have seen? Would they have seen a worsening debt situation, someone who would be likely to struggle to pay £197 a month (or however much your loan repayments are) for years?
The other point to consider is whether you have any better options than stopping paying with this Set Off.
If you can’t afford to make the payments now, there is some risk that your complaint won’t be upheld but you may not have any better options than this Set Off. If you win your complaint, the negative marks will be removed from your credit record, your guarantor released and your balance will be reduced or cleared. That is much better than struggling to pay and running up more debt elsewhere and perhaps getting behind with other debts and bills – those negative marks won’t be cleared if you win your Amigo case.
If you can’t afford to make the payments but your guarantor could, opting for this Set Off will save your guarantor a lot of money if you win your complaint, as they would only get a small percentage back of that money in any future Scheme.
“How do I opt for this?”
The Amigo explanatory email concludes by saying:
“If you wish to exercise your right to Set-Off, please let us know. We will then enable the option for you to confirm this, via a form on your online account.”
So you can phone them up or email them at amigoscheme@amigoloans.co.uk and say you have heard about the right to Set Off and you would like to stop paying and exercise this right. You need to have already made a complaint, so do this first if you haven’t already.
Dave says
Hi Sara,
I have a complaint into Amigo. My loan was £10,000 to date I have paid back £13,043.25 can I go for equitable set off ?
Thanks
Sara (Debt Camel) says
That sounds to me as though you can. This may well be a good option for you if you are struggling to make payments and think you have a good affordability complaint.
Zach says
Hello.
AMIGO Loans
Amount of credit: £3500
Current balance: £2,045.56
Amount I’ve paid: £ 5395.26
I made a complaint back in early 2020 which was denied but then continued to complain just before they fell into trouble. I’m now 33 years old and have a number of debts and in September last year I made the decision to enter an IVA. Due to this my guarantor now makes the payments to amigo from his account but I transfer him the money every month. I am now in a better position in regards to my disposable income but obviously my credit rating is badly damaged although I’m making big steps to improve this. I’m wondering whether I should ask for the ‘ equitable set off’ ‘ as I’m pretty sure the loan should never have been given. I’ve always had small debt problems since I was 18, for example credit cards and payday loans and I’m not happy for my guarantor being responsible for my monthly payments. Even more so that the interest I’m paying is still mega high. Monthly payment is £134 and interest is £70. We both probably can afford to keep making payments but it doesn’t look like anything will be settled until late next year and I don’t think it’s right for them to keep making money from me to keep them afloat.
Thank you.
Sara (Debt Camel) says
In an IVA nothing will improve your credit significantly until it ends in 2026. Not even winning the Amigo complaint. I’m sorry but this was probably an extremely poor debt option for you to have set up.
How much have you paid to this debt yourself, not via paying your guarantor?
Zach says
Hello. I’m thinking maybe the Iva was a bad decision but I was struggling with a debt collector at the time and they assured me it was probably the best solution. I think I’ve paid about £4500 if I take away the 6 payments my guarantor has had to make.
Sara (Debt Camel) says
ok so you have paid more than you borrowed so you should be eligible for equitable set off. (I have no idea if Amigo would take into account payments made by your guarantor so its good if you qualify without them.)
Ask Amigo for this now and they should stop asking your guarantor for anything.
I assume the Amigo debt was listed in your IVA? I have no idea if your IVA firm will stop paying them. But it’s getting the payments from your guarantor stopped that matters most to you i guess.
Zach says
Ok thanks for your help there it’s much appreciated.
The Amigo loan wasn’t added to the IVA as they stated they couldn’t add a guarantor loan to it which is why my guarantor has had to take responsibility for payments.
Sara (Debt Camel) says
They lied, of course you can include an Amigo loan in an IVA. Did they tell you this in writing?
Zach says
No they told me over the phone. They had access to all my loans through my credit file where all of my debts were seen by them and then all added to the IVA apart from my amigo loan.
Sara (Debt Camel) says
and they know you are still paying off the loan by paying your guarantor?
Zach says
Well I’m not sure 100% they know I’m paying him but I did mention that I’d have to when setting up the IVA. To be fair the company I have used are pretty bad at trying to get hold of. I have nothing showing me where my payments are going, how much I’ve paid etc. for example an online account. They gave me one but it has zero Information on it.
Sara (Debt Camel) says
ok, but when they worked out how much you were paying into the IVA, did they allow for you paying the Amigo loan? You may get a nasty surprise on your annual IVA review when they increase the IVA payments a lot…
but this is getting off topic for Amigo and what to do now.
Do ask for equitable set off so your guarantor isnt asked to pay.
Do make a claim to a Scheme or administration.
Do encourage your guarantor to also make a claim if the guarantor could not have managed to make all the payments to the loans from the start from their spare money each month – that gives 2 ways for your guarantor to be released – if you win your complaint he wins his and thats an extra chance worth having.
Sara (Debt Camel) says
And come back here and post on https://debtcamel.co.uk/iva-annual-review/ if your IVA payments jumps a lot at the annual review.
Zach says
Ok thanks so much for your help Sara
Tom says
Hi Sara,
I have sent a complaint email to amigo with a view to apply for an equity set off next month when I have paid the original balance I have received an email back from them asking me if I believe the loan was unaffordable for me and my reasons why. They have also asked me to tell them how it has negatively to impacted me. I don’t believe they have ever asked this questions before. I can obviously give them a detailed run down of this. I have had a lot of top ups in a small space of time in the past plus on my top ups they never actually checked my bank statements and only spoke to my guarantor. What would your advice be in my response?
Sara (Debt Camel) says
You can reply that you were only getting top ups because you were so short of money and you now realise that this shows the provious loan was unaffordable for you.
Sandra says
Hi Sara I had an email asking me to vote against or for the new scheme I believe I have a valid complaint and I did vote for the equity set off also what would be in my best interest for this scheme
Sara (Debt Camel) says
So you are voting to say which of Amigo’s Schemes you like – if you vote No to both you are saying you would prefer Amigo to go into administration.
You had a loan and 4 top ups? That is a VERY strong complaint. I would hope you would get most of the upheld in either Scheme or in administration.
The main difference for you may be the “deduction for unpaid interest” that Amigo makes if it upholds a top up loans but not the previous loan it refinanced. Sometimes this deduction is only a few hundred pounds but I have seen some over £3,000.
No other lender makes this deduction. The ombudsman told one lender who tried that it was unfair. I have never see an administrator in a high cost lending case make this deduction.
That would obviously make a big difference to what you might get back. So much that you could (but it isn’t certain) be better off in administration where you are only repaid 31% of the redress if they don’t make this deduction (on Amigo’s figures) rather than in Amigo’s New Business scheme where you may get 41% back of a lower number after this deduction.
Sandra says
So it seems against then as I’d be hopefully better off if they go into administration if my complaint was successful
Sara (Debt Camel) says
Well if Amigo uphold all the loans, no you wouldn’t be. I am afraid it’s guesswork as to which loans would be upheld in a Scheme by Amigo, which by administrators, how large Amigos deduction for unpaid interest might be.
Stacey says
Hi Sara.
I have made a complaint to Amigo my Loan was for £5000 (£207.51) monthly payback I’ve currently paid back £6,847.83p I currently owe 3,596.73p which in total will go beyond 10,000 I also have NO guarantor as they passed away 1year ago who paid the money back I have struggled to continue paying I did call them they said I had to keep paying …what should I do ?
Thanks.
Sara (Debt Camel) says
What is the rest of your current financial situation like?
Was your guarantor making payments? Did they leave any money when they died?
Stacey says
Hi Sara
I currently don’t work, my Husband does who now continues to pay the loan monthly, it also effects other bills now as he has to pay them and he has no loans with Amigo…My Mum (who was the guarantor) left no money and would only pay when my Husband couldn’t. But they said no to my husband being guarantor but happy to have him pay out of his bank.
Sara (Debt Camel) says
do you have other debts apart from this one?
Stacey says
Other loans No
Bills yes.
Sara (Debt Camel) says
OK so for you this is no longer a guarantor loan, it is just any old loan. You could just go for a debt relief order (see https://debtcamel.co.uk/debt-options/dro/) and get it wiped out. If you had a lot of other debt that might be sensible now.
As you don’t have other debts, it seems worth waiting and seeing if Amigo will uphold your complaint in a Scheme (or administrators will uphold your complaint in administration) as that would clear the debt and get you a bit of money back.
But in the meanwhile you should be able to ask them for Equitable Set Off as the article above says. If they reject this (ask them why!) then you could simply cancel your direct debit to Amigo. There is nothing they can do to make you pay at the moment with this Scheme coming up – they may threaten court but that take a VERY long time and isnt going to happen before the Scheme or administration.
You should NOT get behind with important bills trying to pay this Amigo loan.
If you would like confirmation of your options, national Debtline on 0808 808 4000 can talk you through them. Make sure you tell them your guarantor has died.
National Debtline can also set up a DRO for you if in the end late this year or early next year you lose your claim in the Scheme / Administration.
IF you are thinking about how to vote on the Scheme, read https://debtcamel.co.uk/amigo-which-way-to-vote/. For you getting the balance cleared may be the most important factor, not whether you get 31% or 41% back of the interest you have paid. So who would you like to decide your claim, Amigo in a Scheme or administrators in administration? And do you like the idea of Amigo being able to start lending again?
Gaz says
Hi. I really don’t know how to vote. Let’s be honest amigo won’t uphold all loans to everyone who has a claim against them. I’d rather them just go away an take the 31 % rather them uphold 1 or 2 loan
Sara (Debt Camel) says
Have you had several loans from Amigo that you think were unaffordable?
A loan is only affordable if you can repay it and still be able to pay your other debts, bills and living expenses, without being so short of money you have to borrow more.
Gaz says
I’ve had about 12 top ups an paid way over what I’ve borrowed. At lot of them top ups was because of gambling issues which amigo never checked. I had the claim against amigo sent to FOS but just missed out out full redress by a week. I currently have the set off but I’m 3 grand in arrears
Gaz says
Hi. I also had this reply a year ago to the day.
Hi Gary
I hope you are well.
I have heard back from the complaints team this afternoon regarding your interest. This was frozen by mistake on our behalf, and so we will not be reinstating this as a gesture of good will. No further interest will be applied to your account moving forwards.
Thank you,Lauren @amigo
Sara (Debt Camel) says
That sounds like an incredibly strong claim. I think the maximum number of top ups I have seen before is 7!
Have you voted on the Scheme? Because with all those top ups, the biggest issue for you (apart from whether you want Amigo to be able to restart lending) may be the “deduction for unpaid interest” Amigo makes if it uphold a top up loan and not the previous loan that the top up loan settled. See https://debtcamel.co.uk/amigo-which-way-to-vote/ for more about this.
George says
Hello. My name is George.. I have had an account with you for a minimum of 3 years.. my loan was £10,000 or 12,000… 3 years+ of continuous paying and my balance is £9800. £394.00 has come out my account every month and i have been struggling to eat, travel, afford anything and as a result i have had to take out other loans for survival which has put me in great debt. I’m aware of the new scheme and have optd in as i need this account ended and need some sort of financial compensation as i could never afford the loan in the first place and shouldnt have qualified in any way, but ive been forced to make monthly paymenrs of £394.00 and now i dont talk to my brother either so thats a problem.. i actually cant afford to continue payments as ive lost over 2 stones in the last 6 months due to not even being able to afford food and am close to losing my car and job.. I dont have any money left.. does this look right as an email to amigo(ive sent it), its all true, im mentally and financially stressed.
Sara (Debt Camel) says
That looks fine to me at this stage.
If later they reject your complaint you can go back and provide other info eg your bank statements.
Julia Brownell says
I have offset my loan. 6500, pay back 7250, owe around 9000 inc interest. Since i offset, they have been adding interest, missed payments, of 171 month. Can I get these frozen or removed.
Sara (Debt Camel) says
You can’t get the interest stopped, but it is capped at what you were quoted when you took the loan out. So if in the end you lose your complaint, you haven’t had an extra years interest added, you still only have to pay back the same.
And of course if you win the complaint all the interest is removed.
Same with the credit score – if you win the complaint in a Scheme or in administration if the Schemes are rejected, then yiour credit record is cleaned.
Shawn says
What happens if they accept equitable set off but you lose your complaint?
Sara (Debt Camel) says
Some questions that may sound irrelevant but aren’t….
Can you afford to make the payments at the moment and for the rest of this year?
Is this your first loan from Amigo?
What are your guarantor’s finances like? (I am not going to suggest you ask them to pay!)
Shawn says
I’ve had like 4-5 top ups with the last one being 2 years ago. I’ve missed a payment in last 6 months and whilst I could probably pay I’ve been struggling, opened multiple credit cards etc…
Guarantors finances are fine as far as I’m aware
Sara (Debt Camel) says
So 4 or 5 top ups is normally a sign of a very strong complaint that the last loan (at least!) was unaffordable.
If you go for the equitable set off, it allows you pause paying. Your credit score is harmed and arrears accrue but your guarantor is not asked to pay.
If you win the claim in the Amigo Scheme (or in Administration if a Scheme is not approved), then the balance will be cleared and your credit record will be cleared. And you may get some cash refund – see https://debtcamel.co.uk/amigo-which-way-to-vote/ which looks at various factors including Amigo’s unfair “deduction for unpaid interest” when only later loans are upheld, not the loan that was being topped up.
If you don’t win the claim, then the equitable set off ends and you have to start repaying it. Amigo caps its interest, so although interest carries on being added during the time you aren’t paying, you won’t in the end pay any more interest.
If you can only pay Amigo by using other debt more (getting higher card or overdraft balances, taking out more credit) or by missing payments to other debt or important bills, going for equitable set off is probably your best options. Because that gives you a chance of emerging from all this in a better position. Otherwise if you struggle to pay Amigo and your other debts get worse, well you may win the Amigo claim and still be in a bad position because of all the other debts you have run up and the interest on them.
The fact that you have had so many top ups does suggest you are likely to win the claim.
If you want to talk through the options in detail, you can phone National Debtline on 0808 808 4000.
Shawn says
Thanks for the help and advice Sara, just one last thing… If I go into set equity which I now understand will harm my credit score, will it also affect the credit score of my guarantor?
Sara (Debt Camel) says
No, the Amigo loan doesn’t show on your guarantors credit record. The only ways that can b3 harmed is if Amigo go to court for a CCJ which isn’t going to happen with equitable set off.
Tom says
Hi Sara my partner has a loan with amigo as her mum as a guarantor I’m left to pay it as neither of them can afford it any month, the loans been topped up 3/4 times
Over 7 years. The last loan was for £5000 having already paid back just over 6000 with just under another 5000 outstanding, would they be eligible for an equity set off ?
Sara (Debt Camel) says
Was the last loan originally affordable for your partner? for her mum?