Amigo Loans: A Controversial Past and the Road to Redress

Amigo Loans was once a prominent provider of guarantor loans in the UK, offering credit to those with poor credit histories who could provide a guarantor (a friend or family member) to guarantee the loan. However, the company faced intense scrutiny and regulatory action due to its lending practices, ultimately leading to a halt in lending and a redress scheme for affected customers.

A History of Controversy:

• Aggressive Lending: Amigo Loans was criticized for its aggressive lending practices, often targeting vulnerable borrowers who struggled to obtain credit elsewhere.
• Lack of Affordability Checks: The company faced accusations of inadequate affordability assessments, leading to loans being granted to individuals who couldn't afford repayments.
• High Interest Rates: Amigo Loans charged high interest rates on its guarantor loans, adding to the financial burden on borrowers.
• Misleading Information: Some customers alleged that they were misled about the terms and conditions of their loans or the implications of being a guarantor.

FCA Action and Redress Scheme:

• Regulatory Scrutiny: The Financial Conduct Authority (FCA) investigated Amigo Loans and found serious failings in its lending practices.
• £72.9 Million Fine: The FCA imposed a £72.9 million fine on Amigo Loans, which was later waived due to the company's financial difficulties.
• Scheme of Arrangement: To address customer complaints and avoid insolvency, Amigo Loans proposed a Scheme of Arrangement to compensate those who were mis-sold loans. This scheme was approved by the High Court in May 2022 and involves a payout to eligible customers.

The Amigo Scheme:

• Compensation for Mis-sold Loans: The Amigo Scheme provides compensation to customers who were mis-sold loans between November 1, 2005, and November 29, 2020.
• How to Claim: If you believe you were mis-sold a loan by Amigo Loans, you can submit a claim through the Amigo Scheme website.
• Claim Deadline: The deadline for submitting a claim was May 26, 2023. However, you may still be able to submit a late claim under certain circumstances.

Amigo Loans Today:

• Cease of Lending: Amigo Loans ceased lending in March 2023 and is currently in the process of winding down its operations.
• Focus on Redress: The company's primary focus is now on fulfilling its obligations under the Scheme of Arrangement and compensating affected customers.

Important Notes:

• Check Your Eligibility: If you had a guarantor loan with Amigo Loans between 2005 and 2020, you may be eligible for compensation.
• Seek Advice: If you're unsure about your rights or need help with the claims process, consider seeking advice from a consumer rights organization or a solicitor specializing in financial services.

Useful Links:

• Amigo Scheme Website: https://www.amigoscheme.co.uk/
• Financial Ombudsman Service: https://www.financial-ombudsman.org.uk/
• FCA's Final Notice on Amigo Loans: https://www.fca.org.uk/publication/final-notices/amigo-loans-ltd-2023.pdf