THOUSANDS of Amigo loan customers are one step closer to getting a compensation payout.
The UK’s financial watchdog has said it will not oppose the guarantor lender’s latest refund plans.
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Amigo has been accused of giving out unaffordable loans, meaning customers couldn’t repay the money they borrowed.
It has been trying to find a way to meet the refund requests without going bust itself.
A court hearing tomorrow will decide whether Amigo’s new plan to repay borrowers can be put to a customer vote.
A previous proposal was rejected as it was found to be unfair to consumers.
Under the new scheme, consumers would get up to 42p for each pound they’re owed.
The Financial Conduct Authority (FCA) has said it will not attempt to block the new proposals.
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It has also agreed that Amigo can resume trading within nine months, which is another criteria for the refund scheme to be approved.
However, its lending will be limited to begin with.
Despite the progress, however, pay outs aren’t expected to begin until May 2023 at the earliest.
That’s because there are a further two court hearings scheduled for May this year.
Amigo also needs to raise at least £70m within 12 months of the scheme being approved for the proposals to go ahead.
How can I get a refund?
Guarantor loans are targeted at people who can’t borrow from other sources due to poor credit history or a low income.
It involves another person, such as a friend or family member, pledging to make the repayments if the borrower can’t pay.
More than 16,500 complaints were made about guarantor loans last year – a jump of 178% compared to 2020.
More borrowers are failing to meet their repayments, meaning lenders then chase the guarantor for the money.
If a loan was mis-sold or affordability checks weren’t tough enough, you could get a refund.
First, you need to work out if you were mis-sold a loan.
Start by looking back through your old bank statements from when you borrowed the money – you should be able to access these through online banking.
If you were struggling to afford the repayments, then you were mis-sold the loan.
That includes if you were cutting back on other essential expenses such as food, rent and bills.
The lender should never have given it to you if you weren’t able to afford the repayments.
You were treated unfairly if the lender failed to help you when you were told them you were struggling to pay it back.
Even if you’ve paid off the loan, you can still claim if you struggled to make the payments at the time.
If you’re still paying of your debts, you can make a complaint if you’re finding it hard to pay the money back.
If the firm you borrowed from has gone bust, you should contact the lender’s administrator about getting a refund.
To make a complaint to Amigo, you should get in touch as soon as possible.
Send a short email to [email protected] with COMPLAINT as the subject, outlining your situation.
You will need to include information such as how much the loan was for and when it was taken out, and explain that it is an affordability complaint.
MoneySavingExpert and DebtCamel have template letters you can use – all you need to do is fill in your specific details.
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