Amigo’s Scheme – June – my summary of the current situation · Debt Camel

UPDATES

Mid August 2024

And the deadlines have slipped yet again. There are just under 4,000 people still waiting for a decision, or a revised decision after winning an appeal, or a recalculation.

There are also now (21 August), about 8,000 people where Amigo has wrong or missing bank details:

• this includes £1.7m of redress to be paid “in full”, and
• £2.4m of Initial Scheme Payments.

Most of these are people with loans taken out longer ago, so their contact details may be out of date too. And some people are worried the emails or texts they are getting about updating their bank details are a scam.

If you haven’t already been paid, check and double check the bank account details on your Portal Account. If you can’t login to the portal, call Amigo on 01202 629798 and Amigo will reset your portal login.

If these amounts are not paid by the time the second payment is made later in the year, you can’t get paid afterwards as all the money will have been distributed.

24 June 2024 – my summary of the situation:

1. People who have not yet had a first decision email (FRL) If you haven’t had a recent communications from Amigo apologising for the delay you should contact Amigo urgently.
2. People who have escalated a decision No-one has yet had a revised decision after winning an appeal.
3. People whose defaulted loans have been sold to Intrum before 2022 It still isn’t clear whether cash refunds will be paid by Intrum or Amigo.
4. People who are waiting for a “full refund” to be paid Some dates seem to have not been paid. Some people are still waiting for recalculations of the 8% interest and any recent payments.
5. People who are waiting for the first percentage payment to be paid Some dates seem to have not been paid here as well. Some recalculations seem to be being done – I don’t know why unless Amigo messed up the numbers the first time!
6. People who do not understand what they are going to get
   If you don’t understand your decision email (FRL) post a screenshot of it in the Facebook group.
7. People who have been paid “the wrong amount”
   If you have been paid “too much” or had 2 payments, it may well be that you have had a full refund and a first percentage payment.
   If you think you have been paid too little, post a screenshot of your decision email in the Facebook group or phone Amigo up. A few people have been paid too little and got this speedily corrected.
8. People who have been paid the first percentage payment (and the full refund if relevant) and are now waiting for the second one
   Enjoy the summer. See you in November.

29 May 2024 – first scheme payment will be 12.5p in the £

• Amigo says “substantially all” claims have been determined and adjudicated – 99.2%
• it knows enough to be sure it can pay 12.5p in the £ so that is what it has set the Initial Scheme Payment Percentage at.
• you will get 12.5% of the amount on your Amigo email decision labelled Total Cash Claim Value or Scheme Cash Claim
• you will be paid this first amount within the next 30 days, or within 30 days of receiving an accepted Scheme Outcome, whichever is later. So the large majority of people should get this in June 2024
• Amigo says it will prioritise payments based on correct bank details being provided and age of the Outcome Letter issued (oldest to newest).
• Amigo is still saying at least 17% for the total amount to be paid, so that means 4.5p in the £ will be paid late in the year

10 April 2024 – 94% of decisions issued

• nearly a month late, Amigo still hasn’t quite reached the target of 95% of decisions it is said it would achieve by mid March
• it now expects to have issued over 98% decisions by the end of April, with the rest coming in early May

14th March 2024 – Amigo gives a clearer payment timetable

Decisions:

• Amigo has now crawled up to 91% of decisions issued.
• they now say they expect to issue 95% of all decisions 22 March 2024, with the remainder being issued by mid-April 2024.

“In full” payments

• payments have started for the “In full” refunds;
• where a decision was issued on or before 1 February and you do not have a live loan, your payment should be made by the end of March
• where a decision was issued on or before 1 February and you do have a live loan with a balance outstanding, your payment should be made by the end of April
• where a decision was issued after 1 February, your payment should be made between mid April and end May

“Percentage” payments

• it still expects to be paying at least 17p in the pound to people expecting to get the “percentage” refunds
• it has rowed back from saying it expects the first instalment of the percentage payments to be made in April or May. It now says that it expects to “declare an interim dividend” in April or May – that is the percentage that it will pay as the first instalment, eg 10% or 12% say. And it expects payments of the first instalment to be within 30 days of making that statement about the amount.
• so they could be in June…

Appeals

• where there has been an appeal, the time will be confirmed in your decision letter.

27 February 2024 – another delay to decisions & payments

• Amigo has still only got up to 88% of decisions issued
• it now hopes to have issued over 95% of decisions by mid-March 2024, with the rest being issued in early April
• Amigo expects to start paying the “in full” refund amounts at the end of February, but these will be done in batches so not everyone will get theirs then
• the payment of the first installment of the “percentage payments”  has been put back to April or May with the final installment about 6 months later.

A reminder of who may get some “in full” refunds:

You have to have repaid at least the amount you borrowed.

From that point, you may get a full refund, not at 17%, depending on the date of your complaint/claim:

• you will get a full refund of payments made after 1 December 2021, if you had complained before that date;
• you will get a refund from the date you complained if that was between 1 December 2021 and 26 May 2022;
• you will get a full refund of payments after 26 May 2022, if your first complaint was in the Scheme.

Previous months updates

January 2024 

• on 25 January Amigo admitted it has only sent out 75%
•  of decisions.  This is only 2% more than on 9 January.
• it says “We anticipated that all responses would be issued by the end of January 2024, however, the remaining work and complexities in assessing and calculating certain claims, especially for some claimants with outstanding loan balances, has taken longer than initially anticipated. Although responses are still being issued, and will continue to be, our intention is to issue all responses by mid-March 2024.”

December 2023

• the Amigo scheme page now says they have issued 71% of decisions
• Amigo has told some people with current loans to stop paying
• decisions for current loans are being sent out but not many so far
• if you have made recent payments, some may be refunded in full. In the decision you are sent, these are being called “set off refunds”. The “total cash claim value” on the decision is the amount that will be paid at a reduced percentage, expected to be about 17%.

• Amigo has issued 45% of decisions
• Amigo has been deleting a lot of loans from all three credit reference agencies . If your loans have been cleared, this is probably because your claim will be upheld. But this isn’t definite until you get the claim decision.

October 2023

• Amigo has issued 38% of decisions. It says almost all the rest should be issued by the end of December and they will all be issued by end January
• the process to remove CCJs will continue to March
• Amigo is confident the payout percentage will not be less than 17%
• it is now clear that Amigo not going to pay many borrowers where the loan has been upheld as unaffordable but the guarantor made some payments. This is ethically wrong and entirely unexpected – redress from mis-sold guarantor loans has never been handled like, by Amigo before the Scheme or by the ombudsman. You can appeal but it isn’t clear that this will succeed.
• the best estimate of the percentage payout is still at 17% but this can still change.
• Amigo now says: “We expect that the initial cash payment to customers will be in early 2024. We are unable to confirm the dividend and make interim payments until almost all claims have been decisioned in full, causing the delay from November, as previously expected. The final payment will be delayed until late 2024 (around the time that the business enters liquidation).”

September 2023

• the first rejections for current loans are going out.  If this loan has caused you problems, appeal a rejection. 

August 2023

• the first UPHOLD decisions are at long last being issued
• if only some of your loans have been upheld, look at an appeal. The first person has reported winning an appeal.
• some loans have been sold to Lantern. In most cases these are loans where neither the borrower or the guarantor made a claim.

March 2023

• Amigo has announced it cannot raise the money from shareholders so it will be liquidated
• this Scheme continues in “Fallback Mode” – see Amigo to close & Scheme goes into Fallback for details
• it is now expected that Amigo the first payments may be made in late 2023 and there may be a second, sm
  aller payment in 2024.

December 2023

• The deadline for making claims to the Amigo Scheme was 26 November 2022. It is now too late to make a claim.

Amigo’s Scheme – the background

Amigo’s Scheme of Arrangement is now in operation after it was approved by the court on 23 May 2022.

The Scheme was proposed because Amigo couldn’t afford to carry on paying full refunds to its borrowers and guarantors who were winning affordability complaints.

Amigo had proposed a different Scheme in 2020 that was rejected in 2021. Amigo has now spent nearly a year getting its current Scheme proposed. For more details on the first Scheme, why it was rejected, how the second Scheme is different, and the voting on the second Scheme, see Articles on Amigo Schemes.

In the Scheme, Amigo makes the decision about whether your claim should be upheld. If it is rejected or only upheld for some of your loans, you can appeal this decision to the Independent Scheme Adjudicator. You cannot appeal to the Financial Ombudsman.

Which loans and customers are covered by the Scheme?

All loans made by Amigo before 2021, including those under its previous brand name FLM, are included in the Scheme. For loans that were settled more than seven years ago, Amigo may no longer have the loan details. You can still complain about these older loans but it may be necessary for you to produce evidence about them.

Both borrowers and guarantors could make a claim to the Scheme.

Amigo has started lending again with a pilot scheme under a new brand, Reward Rate. Any complaints about new loans will not be covered by the Scheme and customers will be able to make a complaint about them as normal – first to Amigo and then to the Financial Ombudsman.

The definition of “unaffordable”

A loan is only “affordable” if at the time the loan was given, it was likely that you could repay it on time and still be able to pay your other debts, bills and everyday living expenses.

If paying Amigo left you so short of money you had to borrow more or you got behind with bills then it was “unaffordable”. This often happened with Amigo loans as many borrowers were desperate to try to protect their guarantor.

Amigo should have checked that a loan would be affordable for both the borrower and the guarantor. For a guarantor, this would mean that they could make all the repayments out of their income and still be able to pay their own debts, bills and living costs. A guarantor who had a house may not have had enough spare income to repay the loan so it was unaffordable.

But Amigo’s affordability checks were very poor. That’s why they were losing 88% of cases at the Financial Ombudsman.

Amigo often offered top up loans and the checks on these weren’t any better, even though people were getting deeper into debt. Repaying the first Amigo loan may have left you in financial difficulty, so a top up loan may have appeared to be a good option, even though it made your debt situation worse.

What will you get if you win the claim?

When Amigo upholds a claim, it will tell you what the “redress” calculated is. You will only get paid a percentage of this, not the full amount (unless some of your payments are very recent).

Redress for a borrower who has a claim upheld

For a borrower with a repaid loan, redress will be:

• a refund of the interest they paid on the loan;
• plus 8% statutory interest;
• Amigo is making a deduction if your guarantor made any payments. If your guarantor has also made a claim, they should be refunded. If they haven’t then no one is being refunded for these amounts. You can appeal this decision, which is ethically very wrong, but it is not clear it you will win.

For a borrower with a current loan, redress will be:

• a refund of any interest if they have repaid more than the amount borrowed plus 8% statutory interest, otherwise, their balance will be reduced;
• their guarantor will be released;
• if there is still a balance after the reduction, you can make a lower affordable payment arrangement to clear it.

In addition, any problems on your credit record will be removed for loans that are upheld. This will include having any CCJ removed (the legal term is set aside) and removing the default showing on the debt with Intrum if your debt was sold.

Redress for a guarantor who has a claim upheld

A guarantor’s redress is the full amount they have paid to a loan, not just the interest, plus 8% statutory interest. And if there is a current loan, they will be released as guarantor.

Previously it had been expected that guarantors would be refunded if a borrower won a claim that the loan was unaffordable even if the guarantor had not made a claim. It has now become clear that Amigo is reducing the payments to the borrower and refusing to pay the guarantor where the guarantor has not claimed.

8% statutory interest

This number is NOT 8% of the interest you should get refunded.

It is 8% per year from the time of the repayments until 28 February 2022. So if your loan was settled several years before 2022, you may get 20% or more added.

BUT you will only get a % of this redress

That redress figure may look great. But you are not going to be paid that amount, just a percentage of it.

Amigo originally estimated that at 41p in the £. If your full redress is say £3,000 that would have meant you will be paid 41% of that – £1,230. But a lot more people made claims than Amigo expected – 210,000. That has reduced the amount you might get to 20p in the £.

And with the March 2023 announcement that Amigo has failed to raise the money from shareholders, there will be less cash to be refunded. The amount is now expected to be about 17p in the £.

So from a calculated redress of £3,000 you may get £510.

Exception – full refund for “continuing payments”

Some customers will get a “full refund” of certain payments they made to the loan provided that they have repaid at least the amount they borrowed and their claim is upheld. These customers are due a full refund of payments:

• from 1 December 2021, if they had complained on or before that date;
• from the date they complained, if that was between 1 December 2021 and 26 May 2022; or
• from 26 May 2022, if they did not complain before the Scheme started.

This is set out in full in 6.33 of the Explanatory Statement.

The purpose of this is so that if your claim results in a refund, payments you made after the relevant date will be refunded in full provided that you have repaid more than the amount you borrowed.  For a guarantor getting a refund, the “repaid more than you borrowed” test does not apply.

Here are three borrower examples:

• a borrower who made a complaint in March 2021 (so before 1 December 2021) and who at 1 December 2021 had already paid back more than they had borrowed will get a full refund of payments they made after 1 December 2021
• a borrower who made a complaint in March 2022 (so after 1 December 2021) and who in March 2022 had already paid back more than they had borrowed will get a full refund of payments they made after that date
• a borrower who made a claim to the Scheme in September 2022 (so after the Scheme had started) who by 26 May 2022 had already paid back more than they had borrowed, will get a full refund of payments they made after 26 May 2022.

What happens after you make a claim

The deadline for making a claim has now passed

Keep an eye on your claim

When you have made a claim, you may not hear anything for months.

Amigo may send you an email when they have decided your claim saying you can log in to the portal and see the result.

But it is a good idea to check the portal every month or so even if you haven’t had an email. They may have sent you an email that you missed as it went into spam.

You can also look at the Facebook group – see the bottom of this article.

Working out how much people will get

When Amigo have decided all the claims and appeals they can then add up the total amount of redress. They then divide that amount by the money they have to distribute – this gives the “pence in the £” amount they will pay.

This will probably be done in two stages. There will be a first, larger payment possibly in the first quarter of 2024. And then a small payment in 2024 to pay out the remaining money.

Should you appeal a decision?

If your claim has been rejected or only partially upheld  With some loans upheld and some rejected – you can appeal this decision.

You are the one who knows how much trouble the Amigo loan caused you.

The first Amigo decision will probably have been an automated “Computer says Yes/No” decision – they have had 200,000 complaints to decide. But in the appeal process, this will be looked at by a human.

You should also appeal if you don’t agree with the numbers given. If you think you had more loans than were listed. If you don’t know why the Total Cash Claim Value is less than the other numbers suggest.

Get more loans upheld

Getting more loans upheld will:

• increase the cash you are paid, or reduce the balance you owe
• if you get earlier loans upheld, the extra 8% added amount will also increase
• if your current loan is upheld, your guarantor will be released.

If you have bank statements or any other evidence about your finances at the time you took a loan, include that with your appeal. These will help your case.

Credit records

Getting more loans upheld will also clean any problems on them from your credit record.

If your credit report is wrong at the moment eg because Amigo did not add a default when you stopped paying, then it is important that in your appeal you say why the loan should be upheld. BUT ALSO say that if the loan is not upheld, you want a default date added to your credit record back in month/year “in accordance with the SCOR reporting rules”. Defaults drop off your credit record after 6 years – a non-defaulted debt will stay on your credit record for 6 years after the date it is settled.

HOW TO APPEAL

If you think the numbers are wrong, say why.

If you made all the payments but Amigo seems to think your guarantor made some, challenge this.

If you think more loans should be upheld: Get bank statement for 3 months before the loan started – these are the best evidence that a loan is unaffordable. You can get these going back at least 6 years even from closed accounts. Don’t assume you won’t be able to, ask for these immediately from your bank. If the loans are more than 6 years old and the bank account has been closed, look at what other evidence you have – payslips, P60s, tax returns, emails about missed payments or CCJs etc

Download & send a current credit report, eg TransUnions’ Statutory Report. If you have had loans deleted from your record because of winning other affordability complaints, send Amigo evidence about these.

Explain about recent problems before the loan application – only on benefits, health issues, gambling, economic abuse, recent missed payments, payments arrangements, DMP etc

And if you were topping up a previous loan, explain how that loan made your situation worse.

If all of your loans have been upheld and the numbers look right

You have no reason to appeal this decision just because you will only be paid a percentage of this. This would not get you any further money.

You should log in to the portal, accept the decision and give your bank account details.

Sale of loans to Lantern

In August and  September 2023 some people have been notified that their loan has been sold to Lantern, a debt collector. The sale of loans to a debt collector is perfectly legal and you can’t challenge this.

In most cases these were loans where no one had made a claim to the scheme. If your loan has been sold and you had made a claim to the Scheme which has not been assessed, ask Amigo why.

The loans are being sold as guarantor loans – the guarantor has not been released and if the borrower doesn’t make an arrangement to pay the guarantor will probably be asked to.

We don’t yet know how “reasonable” Lantern will be in accepting low arrangements to pay. If you or your guarantor has a problem, leave a comment below here but also talk to a good debt adviser – your local Citizens Advice or if you prefer the phone National Debtline on 0808 808 4000.

Any questions or comments?

Here are Amigo’s contact details.

Or you can post queries and comments on the Amigo Loans Creditor Group in Facebook: https://www.facebook.com/groups/4590874374272947

That allows you to post a screenshot of your decision if you don’t understand it.

You can post anonymously in that group. If you are setting up a Facebook account to do this, add a profile picture – it means your posts and comments are more likely to be approved quickly.

Do not send me a message instead – I won’t reply.