Amigo Loans, a UK-based guarantor loan company, has been making headlines recently due to its financial troubles and the impact it has had on its customers. Many people who have taken out loans with Amigo are now wondering if they can still make a claim against the company. In this article, we will explore the current situation with Amigo Loans and whether or not you can still make a claim.
The Background of Amigo Loans
Amigo Loans was founded in 2005 and quickly became one of the UK's largest guarantor loan companies. The company's business model was to provide loans to individuals with poor credit scores, as long as they had a friend or family member who could act as a guarantor for the loan.This meant that if the borrower was unable to make repayments, the guarantor would be responsible for paying back the loan. Amigo Loans became popular due to its easy application process and quick access to funds. However, the interest rates on these loans were often very high, and many customers found themselves struggling to make repayments. In 2018, the Financial Conduct Authority (FCA) launched an investigation into Amigo Loans' lending practices and found that the company had not properly assessed whether borrowers could afford to repay their loans.
The FCA's Ruling
In December 2020, the FCA ruled that Amigo Loans must pay compensation to customers who were sold unaffordable loans. This ruling came after thousands of complaints were made by customers who were struggling with their loan repayments.The FCA also ordered Amigo Loans to change its lending practices and ensure that all loans were affordable for borrowers. As a result of this ruling, Amigo Loans was forced to set aside £35 million to pay compensation to its customers. However, the company has since stated that it does not have enough funds to cover these payments and has put a temporary hold on all compensation claims.
Can You Still Make a Claim Against Amigo Loans?
The short answer is yes, you can still make a claim against Amigo Loans. The FCA's ruling still stands, and the company is legally obligated to pay compensation to customers who were sold unaffordable loans. However, due to the company's financial troubles, there may be a delay in receiving your compensation. If you have already made a complaint to Amigo Loans and are waiting for a response, you may have received a letter stating that your claim has been put on hold.This is because the company is currently in the process of restructuring and has put a temporary hold on all compensation claims. This means that you will have to wait until the company's financial situation improves before your claim can be processed. If you have not yet made a complaint to Amigo Loans but believe that you were sold an unaffordable loan, you can still make a claim. You can do this by contacting Amigo Loans directly or by using the services of a claims management company. However, it is important to note that if you use a claims management company, they will take a percentage of your compensation as their fee.
What Happens if Amigo Loans Goes into Administration?
There has been speculation that Amigo Loans may go into administration due to its financial troubles.If this were to happen, it would mean that the company would be unable to pay back its debts and would have to close down. In this scenario, customers who are owed compensation would become creditors of the company and would have to wait for the company's assets to be sold off before receiving any compensation. However, it is important to note that Amigo Loans has stated that it is not currently considering administration and is working on a plan to ensure that it can continue to operate and pay back its customers.
What Should You Do if You Have an Amigo Loan?
If you currently have a loan with Amigo Loans, you may be wondering what you should do. The first thing you should do is continue making your loan repayments as normal. If you stop making payments, it could negatively impact your credit score and make it more difficult for you to obtain credit in the future. If you are struggling to make your loan repayments, you should contact Amigo Loans as soon as possible.The company has stated that it is willing to work with customers who are experiencing financial difficulties and may be able to offer alternative repayment plans.
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