Amigo Loans has been in and out of the spotlight after it was reported that their annual profits have been sufficiently reduced by customer complaints.
The Evening Express reported that the lender, Amigo Loans, has made a “pre-tax loss of £37.9 million, compared with a £111 million profit the year before“.
The substantial loss has been attributed to Amigo Loans dealing with customer complaints, after the volume of grievances against the lender increased dramatically. “In the financial year ending March 31, complaints cost the business (Amigo Loans) £126.8 million, compared with only around £100,000 in 2019″ (Source: Evening Express).
Amigo currently has a backlog of around “9,000 customer complaints” at the moment, with the Financial Conduct Authority stepping in to ensure that customers who registered a complaint against Amigo loans, wait no more than “eight weeks before their claim is handled” (Source: Evening Express).
Amigo Loans is a UK based lender specialising in loans for people who are self-employed, have low credit scores, have County Court Judgments (CCJ) or who simply find it difficult to get a loan from other providers.
Amigo offer borrowers loans of £1,000-£10,000 over 1-5 years, with loans of under £2,500 available over terms of 1-3 years. One of their main offerings is a Guarantor Loan, where the responsibility for the loan is shared by both the customer and their guarantor – a friend or family member who would back the loan by agreeing to step in if the customer ever missed repayments.
Guarantor loans are longer term loans of 12 months (or more). When issuing the loan, a lender would require a “guarantor” to sign the loan agreement, together with the borrower. In doing so, the guarantor agrees to pay the borrowers loan, if the borrower is unable to. In simple terms, a Guarantor Loan is a Guarantee that the lender will receive their money back.
This latest news, is another in a long line of coverage focused around Amigo Loans receiving customer complaints.
Amigo Loans was in the spotlight in June 2020, with the Financial Conduct Authority launching an investigation into the “creditworthiness assessment process of subprime lender Amigo Holdings“.
Amigo has even been referred to as a “legal loan shark” by members of Parliament. Reports also confirm that Amigo initially set aside £26.6 million to deal with affordability complaints.
We have seen a substantial increase in the volume of complaints and this has led us to make a significant provision, which resulted in an overall loss for the financial yearRoger Lovering, Chairman, Amigo Loans (Source: Evening Express)
Customers are complaining to Amigo Loans about the affordability of the loans they originally took out with the lender, with many customers finding that the original loan was unaffordable.
90% of affordability complaints are being upheld against Amigo Loans, with more and more people claiming against the company for mis-sold credit.
Loan Companies are paying out millions in compensation to customers who have been lent money that they could not afford .
The Reclaim Experts specialise in helping our customers to receive Loan Refunds for a variety of loans including Guarantor Loans, Payday Loans (short term) and Doorstep Loans. In simple terms this is claiming back money that you, the borrower, are entitled to, due to your leader not making the necessary checks before they gave you the loan.
If you have borrowed a loan from Amigo and found that you were unable to pay the loan you could be eligible to claim compensation. Start your claim or get in touch with the experienced Reclaim Experts team who will guide you through the process. Visit this page to see whether you could be eligible to make an unaffordable loan reclaim.