Amigo Loans

You might not have to pay Amigo Loans and you may be due a refund!

Update: If you have taken out or guaranteed a loan with Amigo, you may be affected by a scheme of arrangement that ALL Scheme Ltd is proposing with its creditors.

You may be a creditor if Amigo owes you compensation. Please go to www.amigoscheme.co.uk and read the ‘Practice Statement Letter’ which provides important information about the process. You should do this as soon as possible.

If you do not act promptly, you will lose the opportunity to vote at the Scheme meeting, expected to be in late-April 2021. Further, if the Scheme is approved and then you do not make your claim in the Scheme by the claims submission deadline (expected to be in mid-November 2021), you will lose your opportunity to submit a claim in the Scheme.

Note: MoneyNerd and our service provider are unable to support Amigo Loan refunds. Please do not call.

Amigo Loans has been in the news lately for mis sold loans and compensation. Lots of customers are finding loopholes to cancel their loans, avoid having to repay the loan – and get a refund. You might be able to claim compensation and an Amigo refund!

It’s not your fault. Complaints to the Financial Ombudsman have risen this year from 830 to 2,006, so it’s safe to say that you’re not alone.

Deal with your debt today and feel better tomorrow.

Amigo Loans UK

Who are Amigo Loans?

Amigo Loans is a UK loans company authorised and regulated by the Financial Conduct Authority (FCA). They offer a number of loan products from debt consolidation loans to self employed loans, wedding loans and even guarantor loans. They have been operating since 2005 and market their products to people without a great credit record.

However, marketing to people with poor credit could cause loans to be mis sold and may even open the door to loan refund claims. This is why lenders should always be checking their applicants’ credit ratings.

Credit Score

How Does an Amigo Loan Work?

Customers can apply for an Amigo loan online by stating how much they need and how long they want to repay. Amigo will then assess your credit file and reject or accept your application. You will have to agree to the loan as well as any interest and charges

You then make monthly loan repayments over the agreed period until the debt is repaid plus interest. One of their loan products is available to those with no credit history or bad credit.

LATEST NEWS: Amigo Faces Insolvency After UK rejects compensation cap. (Updated as of June 2021: The Guardian)

Amigo had been criticised by the FCA as a result of their compensation scheme being unfair. With their newest scheme being rejected, Amigo cannot afford to stay in business whilst continuing to pay millions in customer compensation.

What Is an Amigo Guarantor Loan?

An Amigo guarantor loan is a type of loan that allows you to borrow money from Amigo if they have the security of getting payments back from someone acting as your guarantor (in the event you don’t pay).

The guarantor is usually a family member who trusts you to pay Amigo back, otherwise, they will have to repay the money owed. These loans are currently available for credit between £2,000 and £10, 000 over 36 months or longer.

If you think this loan was accepted too easily, you could make a guarantor loan complaint (more to follow!).

UK Personal Debt 2021 Update:
As of April 2021, the total unsecured debt per Adult in the UK was £3,674.

(Source: The Money Charity)

What Is the Interest Rate on Amigo Loans?

There is an APR rate advertised on the Amigo product pages. But be aware, these rates are representative only and you may be offered a much higher rate upon application.

Are Amigo Loans in Trouble?

Yes, as of July 2021, Amigo loans are facing insolvency. A year previous Amigo Loans reported a £27 million loss due to customer complaints and compensation. The investigation cost the company over £126.8M to process last year.

What Happens If I Can’t Pay My Amigo Loan?

If you can’t pay back your Amigo loan, you should speak with them to explain your circumstances and a new repayment schedule. Failing that, you should seek free debt advice from charities and look into the debt solutions available to you.There is also the chance you might be due an Amigo loan refund

Will I Need the Help of a Claims Management Company?

You could use a claims management service to apply for an Amigo refund if you think you were mis sold a loan, but you don’t have to. It is possible to claim compensation independently.

Check to see what Amigo have reported on your credit report (free)

credit score

The first thing to do is to understand what Amigo has reported on your credit report. A recent law means you can get your credit report for free. Do this now. It takes 1 minute. I recommend Experian’s free credit report as this is what most lenders use to assess your credit-worthiness. Don’t worry, checking your report doesn’t impact your score in any way. Check your credit report for free now.

fight back when you get a debt collection letter

Amigo Loans Must Follow New Laws.

Illegal practices and excessively high interest rates have been uncovered by the Financial Conduct Authority (FCA) relating to numerous lenders. For example, Quickquid was fined £18 million for breaking laws.

One of the unfair practices is not conducting robust affordability checks to ensure customers can repay the loan they take out, and a number of people have successfully managed to make a claim for compensation.

You might be able to make a complaint and claim for a refund too!

Law #1: Is the Amigo Loan Affordable?

The law that has been used the most to get compensation is the affordability check law. It states that Amigo must carry out extensive affordability checks, i.e. you must be able to afford to pay it back while also paying for essentials. 

Amigo cannot let you sign for a loan when you cannot make the repayments comfortably. The lender should have looked into your ability to repay in detail. This applies to self employed loans, credit loans, top ups and any other type of personal loan. 

If your lender has not considered your ability to make repayments while also paying for rent, food and household bills, they could be to blame for your debt. 

Did you receive an unaffordable Amigo loan? You should make an affordability complaint and claim a refund.

Affordability complaints have a greater chance of winning compensation. Read this guide to help claim your loan refund.

amigo loans case study

Law #2: Financial Conduct Authority (FCA) Price Cap

This second law can be used to get an Amigo Loans refund, but it is more effective when argued alongside the law above. 

The law relates to interest and fee caps introduced by the FCA. These laws limit what you can be charged in relation to your Amigo loan, namely:

  1. A combined interest and fee charge cap of 0.8% per day
  2. Default fees capped at £15 (default interest can be charged but not beyond the 0.8% per day) 
  3. An overall 100% cost cap, meaning you cannot be asked to pay more than twice you borrowed

These laws pertain to every UK lender. If you believe Amigo has charged you too much interest, you might be suitable to claim a refund with a strong case!

https://monetisetrk.co.uk/?a=15358&c=28229&s1=

Law #3: Taking Your Money

A lender will typically ask permission to collect repayments with a Continuous Payment Authority (CPA). This allows Amigo to collect money from your bank, but they must inform you when they will collect each payment. 

If they fail to give notice of when the payment will be collected, and you subsequently fall into a tough financial position, they are to blame and are breaking this law. 

Other rules relating to CPA are:

  1. Lenders cannot take any money if they have failed to collect two previous payments
  2. Lenders cannot take partial payments. If you cannot pay the full amount they cannot take less to clear out your bank account (unless you give them permission)

If Amigo has broken these laws, it’s time to claim for compensation!

I Can’t Afford My Next Amigo Loan Payment…

If your Amigo loan was affordable, but you are not in a financial position to repay the money owed, there are still options available. 

Read our key steps to stay protected for full details of what to do.

First, cancel any agreement to repay them through your bank, such as a standing order or direct debit. 

Your bank may tell you to inform the lender that the direct debit is cancelled. But you have no obligation to do this. 

The next thing to do is to negotiate a new repayment plan with Amigo. Explain your situation and see if you can get a reduced payment plan. 

Every UK lender must treat you fairly and consider the circumstances of the situation.

Want to Claim a Mis Sold Amigo Loan Refund?

Most of these complaints are settled between debtors and their creditors, sometimes resulting in compensation. For this reason, we do not accurately know how widespread the problem is.

But we can report that the Financial Ombudsman Service (FOS) received over 10,000 objections of this nature in 2017 alone.

You might be one of the thousands of UK residents who are entitled to make a claim and get compensation. You can get a refund from any lender if they broke the law when providing your loan or collecting money.

You can claim a refund if you already repaid the loan within the last six years. And this includes any interest paid plus fees you had to pay – and possibly compensation!

References

CONC 13.1 Application

CONC 2.1 Application

CONC 5.2A Creditworthiness assessment

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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