Guarantor loan company Amigo Loans will miss its target to clear a backlog of approximately 9,000 complaints by 26 June, agreed with the Financial Conduct Authority (FCA).
Amigo entered into an agreement with the FCA on 27 May.
It agreed to set aside £35m to settle the complaints which would have been eight weeks old by 26 June. But since 8 June, the rate of complaints received by the loan company has substantially increased.
The lender is also under investigation by the regulator for its lending practices. In an announcement to the stock exchange on 1 June, Amigo said the FCA was investigating whether its process for credit checking borrowers met regulatory requirements.
Amigo Loans specialises in offering loans to borrowers with a poor credit history, if they have the backing of a guarantor.
The additional cost of complaints received after 31 March 2020, the end of the firm’s financial year, is expected to be significant, the firm said.
The company is in discussions with the FCA to vary the terms of its current commitment to get on top of its customer grievances. It is thought the firm will be given an extension to the deadline to clear the backlog.
Amigo said it would continue to assess each complaint on a case by case basis to ensure fair outcomes for its customers.
Amigo expects to publish its full year results for the year ended 31 March 2020 on or before 23 July 2020.
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.