18 May 2021

Do you have an Amigo loan?

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Amigo Loans Ltd (‘Amigo’) is one of the UK’s largest guarantor lenders. Amigo offers borrowers easy access to mid-cost credit. These would-be borrowers may not be able to borrow from mainstream banks, usually due to their credit history.

How does a guarantor loan work?

A guarantor loan is essentially taking out a loan with an additional person. The person will usually be a family member or a friend who promises to pay back the loan, should you be unable to repay your debt.

A guarantor loan typically appeals to individuals who may have poor credit history and are looking to borrow between £1,000 up to £10,000. The guarantor increases the chances of a loan application being accepted.


It is noted that up to one million borrowers may have been provided with unaffordable loans. This includes both current borrowers and past borrowers from as long as 2005. Following a significant influx of complaints about Amigo in 2020, Amigo underwent various challenges which led them to halt all new lending amongst other things. They continued to offer lending to key workers during COVID-19 and also offered payment holidays to those impacted due to the pandemic, which in turn impacted their financial standing.

Amigo received 14,017 complaints in 2020, compared to having received 583 complaints in 2019.

The Scheme

In an attempt to address the ongoing issues, Amigo proposed a scheme of arrangement (‘Scheme’) which is their methodology of addressing multiple complaints in a fair manner. Accordingly, Amigo will set aside a pot of funds which will be paid out to claimants with successful claims on a pro-rata basis. On 30 March 2021, the English High Court granted permission for the single creditors’ meeting to be convened. This in essence allows existing and past customers of Amigo who believe to have a valid complaint about a loan made between 28 January 2005 and 21 December 2020, to vote either ‘for’ or ‘against’ the Scheme going ahead. Further details can be found at https://www.amigoscheme.co.uk/

If approved, the Scheme payouts could start by 2022. The financial regulator (‘FCA’) issued a letter to the court, which can be found on the public domain, expressing their concern that shareholders would not be impacted by the scheme and rather, the directors of Amigo could receive bonuses in the region of £7.3million should Amigo’s share price recover.

What does this mean for borrowers?

Borrowers who currently hold a loan with Amigo could potentially get their balance reduced, or their respective guarantor could be released in whole, should their claim be upheld.

The Financial Ombudsman Service is currently no longer investigating cases relating to Amigo, given the High Court decision. If you feel you may be entitled to a claim, do get in touch where we can assist you in putting forward an application.


The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss that may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.

About the Author

Saad Abbas Hussain heads the Financial Disputes and Banking department at Connaught's. He has accumulated extensive industry experience within dispute resolution, regulation, and financial services, having previously worked for the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS).

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