Amigo to restrict mis-selling compensation claims with a purpose to keep away from going bust – what it means for debtors
Amigo Loans, the UK’s largest guarantor lender, has today (Monday 21 December) announced it wants to set-up a complaints scheme to deal with ongoing and future mis-selling complaints.
It proposes to initially set aside £15 million for all ongoing and future mis-selling claims, with the option to increase this pot to £35 million. In addition, the company will make a cash contribution to the scheme based on 5% of profit for the next three financial years ending 31 March 2024.
Any existing claim against Amigo Loans, which hasn’t been settled before today, and all future claims, if successful, would have their compensation drawn from this pot – thereby limiting the amount of money that could potentially be paid out. This means you could get less than you’re actually owed.
Amigo Loans has also proposed setting a six-month window for all future claims to be settled in. Further details of the scheme – including when it might commence, pay out, and how many pence in the pound complainants will get, are all yet to be decided. A court will now decide if the scheme can go ahead.
The FCA is also entitled to participate in those court proceedings and indicate whether it objects or not to the scheme. It says this will depend on the detail of the proposals put forward by Amigo to the court.