It has been reported this week, in many major publications including The Times and Evening Standard, that Guarantor lender Amigo Loans, has been ordered by the FCA (Financial Conduct Authority) to not transfer any money out of the company without the regulator’s permission.
Amigo must seek permission from the Financial Conduct Authority before it pays dividends to shareholders or cash bonuses to its bosses after the City regulator tightened its oversight of the troubled guarantor lender.The Times:
The FCA have been investigating Amigo Loans since November 2019, when new consumer protections were brought into force, to “ensure companies do not lend to people who cannot afford the repayments”.
The group said it had entered into an “asset voluntary requirement” or “VReq” with the FCA which means payments to directors or dividends to shareholders must first be approved by the City watchdog.Evening Standard:
The FCA launched a probe into the lender in May over whether it had been assessing clients’ creditworthiness properly, and into whether its governance was in breach of regulatory rules.
Its guidelines state it can use VReq powers “where we suspect serious misconduct may have occurred and harm needs to be prevented immediately.”
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.
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