Amigo Loans plans to restart lending at the end of 2020

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Distressed guarantor Amigo Loans has announced plans to restart lending at the end of 2020. The once thriving subprime lender, valued at around £ 1 billion, has had a turbulent 2020, following millions of Amigo repayments made to former customers who have been mis-sold loans in the past 5 years.

Amigo Loans, which is part of the Richmond Group and is based in Bournemouth, southern England, has served over 250,000 guarantor loans – a product typically used by people looking for up to £ 10,000, but with limited credit history or bad credit, but able to access funds with the help of someone they know as their guarantor and essentially “back up” their loan. In the event of default by the customer, the guarantor will intervene and make the payment on his behalf.

With advertised rates of 49.7% of the representative APR, an Amigo product is considered an expensive loan product, especially since personal loans from your main bank can start at an APR of 3%. However, it is still considered much more affordable than a payday loan which can often exceed 1000% APR.

Rise in Amigo claims

The Bournemouth-based lender has since received millions of potential complaints from former clients claiming that they were mis-sold loans without an affordability check or that they had received add-ons or extensions they had hard to afford. So far the average customer has claimed around £ 4,600 (according to Forces Compare) and any rejected claim is confirmed by the Financial Ombudsman with over 90% approval, which also incurs an administration fee of £ 500 for Amigo, whether or not it gets Mediator approval or not.

As the company continued to lend, Amigo founder James Benamor said the lender “committed slow-motion suicide” and the entrepreneur spoke very clearly about the management of the company on Twitter. and other platforms such as Medium.

James Benamor founded Amigo in 2005

Amigo stopped lending when COVID-19 hit around March 2020 – but recently confirmed that he plans to resume lending later this year, while eliminating his long list of repayments and claims.

Amigo’s share price has fallen dramatically over the past year to 69p around the same time last year – and is now trading at 9.38p



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