This article relates to Amigo’s first Scheme, which was rejected in May 2021. See Amigo’s Second Scheme for the latest news. 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 … [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. 
Lessons from Amigo & Provident – FOS needs to be faster
In administration, customers with complaints at the Financial Ombudsman (FOS) have them returned to the administrators to resolve. The same happens in a Scheme of Arrangement which has been proposed by Amigo in December 2020 and by Provident in March - there FOS complaints are returned to the Scheme to be determined. FOS said in January 2021 it had about 13,000 open Amigo cases and about 500 … [Read more...]
Amigo’s Scheme – who’s next? Implications for the bad credit market
UPDATE - the FCA opposed Amigo's first Scheme on the ground that it was not the fairest possible for customers. The Scheme was rejected by the court in May 2021. Amigo proposed a new Scheme in December 2021, see Amigo's Second Scheme for the latest news. If Amigo's proposed first Scheme of Arrangement is allowed to go forward by the Financial Conduct Authority (FCA), what would be the impact on … [Read more...]
Will an Amigo Scheme of Arrangement abandon vulnerable customers?
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 … [Read more...]
Amigo first Scheme – my estimated numbers don’t look good
This article relates to Amigo’s first Scheme, which was rejected in May 2021. See Amigo’s second Scheme for articles on the second Scheme. 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. On 25 January more information about the Scheme was given. But there weren't any of the useful numbers I … [Read more...]
Amigo seeks refuge from refunds in a Scheme (December 2020)
UPDATES In May 2021 the court rejected the Amigo Scheme accepting the arguments of the FCA that it was not the fairest that could be proposed to customers. See Court rejects Amigo Scheme of Arrangement for details. In December 2021 Amigo published the proposals for its Second Scheme. See Amigo's new Scheme for the latest news. Amigo announced on 21 December 2020 that it is seeking … [Read more...]
Will the Money Shop really pay 80% of refunds? No!
UPDATES In August 2019 the Money Shop announced a Scheme it expected would pay c 80p in the £ to customers of the Money Shop, Payday UK and Payday Express who are owed compensation for unaffordable loans. I said pigs might fly - see the article below. And I think other people such as the FCA and the Ombudsman also express some scepticism... A month late, in September 2019, a revised version … [Read more...]
January 2019 – Wageday Advance proposes cutting the refunds it pays
Wageday Advance asks the FCA for a Scheme of Arrangement On 31 January 2019, Curo, the American parent of payday lender Wageday Advance (WDA) announced it is in talks with the FCA about a Scheme of Arrangement (SOA) for its redress liabilities in the UK. See Curo's statement in its end-of-year results. These liabilities are the payday loan refunds that WDA is having to pay to current and … [Read more...]