High-cost short term lender Amigo Loans will press ahead with a rescue plan to cap compensation payments for nearly 1 million customers after the high court rejected concerns the proposed scheme would unfairly harm them.
Amigo Loans has been made aware that the Financial Conduct Authority did not support the Scheme and has set their concerns with the Scheme in a letter to the lender but did not plan to take any further action.
Recent figures from The Financial Ombudsman Service (FOS) found customers’ favour in 88% of the approximately 1,100 cases that went to a full review and is owed £10 million by Amigo as a creditor.
Amigo has also warned that unless creditors and customers agree to the rescue, it will file for administration and its significant liabilities will rule out any mis-selling payments being made.
Gary Jennison, CEO of Amigo, said “We are delighted that the Court agreed that the Scheme should go ahead. We look forward to our customers having an opportunity to vote and support the Scheme, which we believe is the only real option for customers who are due redress to receive cash compensation. Given it is in their best interests and the real alternative is insolvency, we strongly encourage our 700,000 past customers and 300,000 present customers to vote for their money and support the Scheme. Our customers will get the full information they need to understand exactly what the Scheme means for them, including details of a dedicated phone number and email address to help answer any questions.”
“We are a new management team focused on the turnaround of Amigo and committed to fixing the problems of the past. It is vital that the millions of UK adults who are unable to get finance from mainstream lenders are able to access credit from regulated businesses such as Amigo, rather than less reputable alternatives. We want to play our part in financial inclusion and ensuring the underserved have somewhere to turn for help and support.”