FCA raises concerns over Amigo’s proposed redress scheme but 'won’t take action to block it'
The largest guarantor loan lender Amigo Loans has admitted the financial regulator does not support its proposed new redress scheme. But it says it's been told the regulator doesn't plan to take action to stop the scheme if it's agreed on by borrowers and sanctioned by the High Court.
Anyone with a current or future guarantor-loan mis-selling claim against Amigo Loans may not get the full amount they're owed if the new scheme proposed by the lender goes ahead. It's put forward the plans in a bid to stave off liquidation given the surge of complaints it's facing.
In a statement issued today, Amigo Loans said: "The FCA [Financial Conduct Authority] notified Amigo... on 23 March 2021 that, having completed its assessment of the terms of the scheme, while the FCA does not support the scheme, it is not currently proposing to take any additional regulatory action that might stop the scheme were it to be agreed by the scheme creditors and sanctioned by the court, but the FCA reserves the right to change its position."
The FCA told us it has made Amigo aware of its concerns but said it was unable to add to what the firm had said.
MoneySavingExpert.com founder Martin Lewis has previously called on the FCA to act to protect Amigo borrowers. He said on the issue last week: “I would call on the FCA to intervene, to make sure a fair and proportionate balance of the money available from Amigo for redress is given back to customers, who have often had their lives made very difficult by being mis-sold hideous, over-expensive loans.”
See our Guarantor Loans guide for full info on how to reclaim mis-sold loans for free.
Amigo has proposed a cap on payouts
Here's what it means if you've an existing complaint
Making a new complaint? Here's what you need to know
If you believe you have been mis-sold an Amigo loan - whether you're a past or current customer (or guarantor) - you CAN still make a new complaint and should do so ASAP. Amigo is still collecting new claims but all decisions and further processing are on hold. If the scheme goes ahead, your complaint will then be transferred over as part of the scheme. You just need to bear in mind you might get less than you otherwise will have.
The reason it's important to get your claim in ASAP is that it's best to do it while it's on your mind as people so often put things off and then don't do them. As the scheme will have a deadline, you don't want to miss it. And as we say above any claim you make now will be transferred to the scheme if it goes ahead.
If you are currently paying off an Amigo loan, but think you were mis-sold, you still need to keep up with your repayments. If not, your credit file will be affected and it is likely your guarantor will be asked to step in and make your payments. But you can make a complaint and, if the scheme goes ahead and your complaint is upheld, it is possible that some (or even all) of your outstanding balance will be written off as part of your compensation.
See our Reclaim Guarantor Loans guide for full help on how to check if you were mis-sold and our free reclaiming tool.