Amigo warns its future is ‘under threat’ as it reveals £234m loss
Amigo Loans warns its future is ‘under threat’ as delayed results reveal a £234m loss
By Daily Mail City & Finance Reporter
Published: | Updated:
The future of lender Amigo Holdings is ‘under threat’ after its delayed results for the year to March show a £234million loss.
The firm, which lends to people with a poor credit score if they have a friend or family member willing to make repayments if they cannot, has been battered by complaints after rule changes meant thousands of customers had been mis-sold their loans.
Amigo has been wrangling over a customer compensation scheme with the Financial Conduct Authority (FCA), after it realised it could not afford to pay the millions of pounds of redress.
Amigo, which lends to people with a poor credit score if they have a friend or family member willing to make repayments if they cannot, has been battered by mis-selling complaints
Last night the lender admitted it had still not agreed a new redress scheme.
It warned that it may still go bust but said that hammering out an agreement with the FCA was a ‘realistic alternative to insolvency’.
Chief executive Gary Jennison said its future was ‘under threat’.
He said: ‘We are working hard to rectify the detriment caused some customers and the uncertainty for our people and shareholders, and doing everything we can to find a solution since coming together as a team last autumn.’
Amigo has paused all new lending until it irons out a redress scheme, which caused revenues to plunge 41.9 per cent to £170.8million.
It has now set aside £344.6million to cover the costs of the complaints.
Jennison said that the company was hoping to launch an ‘Amigo 2.0’ when the matter was resolved.
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