This is Money.co.uk has reported that the lender, Amigo Loans, may introduce a scheme to pay off customers, in a last-ditch attempt to stay afloat.
The controversial guarantor lender, whose loans carry interest rates of up to 49.9 per cent, has launched a ‘scheme of arrangement’ to deal with the problem, which will limit the amount of compensation it pays to customers.Thisismoney.co.uk (https://www.thisismoney.co.uk/money/markets/article-9186043/Amigo-Loans-plots-new-scheme-pay-customers.html)
Amigo has been hit this year by tens of thousands of compensation demands from customers who claim they are victims of unaffordable lending.
Amigo has set up a website for it’s customers offering information about the scheme.
The frontpage states:
The Scheme will allow all current and past customers (both borrowers and guarantors) of Amigo Loans Ltd to make a claim if they have a complaint about an Amigo loan made between 28 January 2005 and before 21 December 2020. We strongly encourage you to promptly read the Practice Statement Letter which can be accessed directly below. The Practice Statement Letter provides details about the process at this stage.
Amigo Loans paused lending back in March 2020 during the pandemic but recently confirmed that they are looking to resume lending later this year, even with a long-list of complaints and loan claims from customers.
The Evening Express reported that Amigo Loans 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.
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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