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 (1) timetable for approval & how it may work. This article is a follow-up, looking at seven points of concern about … [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.
Now Amigo is the latest bad credit lender to want one in 2021.
See What is a Scheme of Arrangement and why do lenders want one? for an overview of what a Scheme is.
On 25 January 2021, Amigo announced that it is proceeding with the next stage of the Scheme of Arrangement which it proposed in December. 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 is likely to go into insolvency if the Scheme is not approved. About a million Amigo customers are being texted or emailed … [Read more...]
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...]
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...]
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...]
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...]
We still know very few details about Amigo's proposed Scheme of Arrangement. I asked some questions in Amigo seeks refuge from complaints and made some estimates of the payouts consumers might get in Amigo - estimated numbers don’t look good. See Articles about Schemes of Arrangement for further articles eg about the competition issues that will worry the FCA about Amigo's Scheme. A whole … [Read more...]
When Amigo announced it was seeking a Scheme of Arrangement on 21 December 2020, I said there were very few details and asked some questions. UPDATE: Amigo gave some more information about the Scheme on 25 January, see my article Amigo’s Scheme - timetable for approval & how it may work. But there weren't any of the useful numbers I had been hoping for, so I have not made any changes to the … [Read more...]
UPDATE - on 25 January 2021 Amigo published more details about the Scheme. See Amigo’s Scheme - timetable for approval & how it may work for my summary of what has happened. Amigo announced on 21 December 2020 that it is seeking approval for a Scheme of Arrangement in order to cap the amount it has to pay to customers who were mis-sold unaffordable loans. The announcement says: Whilst … [Read more...]
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. Claims to the Scheme had to be submitted before the deadline in April 2020. It is now too late to submit a Claim if you have not already done this. The following information comes from the latest Scheme report dated 22 May 2020: 182,566 … [Read more...]