A "Scheme of Arrangement" is in place paying some money to borrowers from the Money Shop, Payday UK or Payday Express who were given unaffordable loans. The payout is now expected to start in May 2021 and to complete in June. The claims portal has now closed. See comments below this article for the latest news. The following information comes from the Scheme reports. the latest is from March … [Read more...]
Schemes of Arrangement
These have been proposed, and rejected, by several bad credit lenders.
So far only the Money Shop has had one approved - and that was only because they were heading for liquidation anyway, with no aim to carry on lending. This one will eventually payout c.4% to customers.
In 2021 Amigo and Provident have proposed Schemes.
See What is a Scheme of Arrangement and why do lenders want one? for an overview of what a Scheme is. 
Provident proposes a Scheme to cap refunds
In March 2021 Provident Financial Group (PFG) announced it is proposing a Scheme of Arrangement to reduce the refunds it has to pay to customers. They are the second major lender to seek refuge in a Scheme - Amigo is also proposing one. The PFG announcement also said that the FCA has started an investigation into Provident's affordability assessments and complaint handling since February 2020. … [Read more...]
Will Amigo’s Scheme reject too many claims?
On 24 March 2021, Amigo announced some feedback from the Financial Conduct Authority (FCA) on its proposed Scheme of Arrangement. Full details have now been given - the FCA's Letter of Concerns was published on 31 March 2022. This said: the FCA considers that the Scheme ... may not be compatible with the FCA's rules, principles and strategic objectives. In particular, the FCA is concerned … [Read more...]
Amigo’s Scheme – timetable for approval
Amigo is proposing a Scheme because it can't afford to pay refunds to all the customers who were given unaffordable loans. It says it will go into administration if the Scheme is not approved. Amigo says customers may get a cash refund of about 10% of their proper refund value. I think the amount may be lower. Customers with a current loan, however, will be able to have the full amount of … [Read more...]
Provident’s Scheme – will customers get less than 2% ?
In my summary of the Provident's proposed Scheme, published on 15 March, I said I would be looking at some aspects of it in more detail. The £50m the company is putting up to pay refunds is not nearly enough to pay everyone. The whole point of the Scheme for Provident is that it will cost it less than if it were to pay full refunds. This article looks at how much customers might hope … [Read more...]
Amigo’s Scheme – key points to think about
On 25 January 2021 Amigo announced that it is proceeding with the next stage of its proposed Scheme of Arrangement and published the formal Practice Statement Letter (PSL) that describes the Scheme for the customers affected. I have summarised the proposal in Amigo’s Scheme - timetable for approval & how it may work. This article looks at seven points of concern about the Scheme. A … [Read more...]
Amigo – many customers may do better in Administration than a Scheme!
When Amigo announced it was proposing a Scheme of Arrangement in December, it said: Amigo continues to explore alternative options but it is likely the alternative options would result in those with Redress Claims receiving considerably lower amounts (if any at all) than they would under the Scheme. But that isn't correct for one large group of borrowers who would be significantly better off if … [Read more...]
Is Amigo allowed to delay paying refunds? Does it have a DISP waiver?
When Amigo announced in December 2020 that it was seeking a Scheme of Arrangement to cap the amount it has to pay to customers owed refunds for unaffordable lending, it said: To ensure equal treatment of customers with Redress Claims, Amigo will stop the ongoing payment of all Redress Claims, except for those cases where the Redress Claims result from: (i) reviewed and upheld complaints where a … [Read more...]
Lessons from Amigo – FOS complaint handling needs to be faster
If Amigo’s proposed Scheme of Arrangement goes forward, customers with complaints at the Financial Ombudsman (FOS) will have them returned to Amigo to resolve in the Scheme. My guess is that there may be 10,000 Amigo cases at FOS, possibly a lot more. UPDATE: FOS says it has about 13,000 open Amigo cases and about 500 new cases are arriving each week. If these customers would have had a … [Read more...]
Amigo’s Scheme – who’s next? Implications for the bad credit market
If Amigo's proposed Scheme of Arrangement is allowed to go forward by the Financial Conduct Authority (FCA), what would be the impact on the guarantor market and the wider bad credit market? This article looks at whether other lenders would also seek the protection of a Scheme and the implications for competition in the market. This is one of a series of articles looking at Amigo's proposed … [Read more...]