Frequently Asked Questions


What is a Scheme of Arrangement (Scheme)?

A Scheme (Scheme) is a Court-approved process which allows a company to enter into a compromise or arrangement with its creditors. In this case, a Scheme will enable customers (and the Financial Ombudsman Service) with a valid claim to receive a fair share of the total compensation available. Receiving a fair share of the total compensation means that customers and the FOS will each receive a proportionate share based on the value of their valid claims.

Amigo is proposing two new Schemes of Arrangement (The New Schemes) that we are hopeful both the creditors (including our customers) and the Court will support. These New Schemes are:

  • 1. The New Business Scheme and
  • 2. The Wind Down Scheme

You can find more details on each of the New Schemes by reading the Practice Statement Letter (PSL) here.

Wasn’t I contacted about this before?

Yes, Amigo did previously propose a Scheme. However, in May 2021, the High Court did not sanction the Previous Scheme (meaning it could not go ahead) as the Judge was not satisfied that the Scheme was fair. He therefore suggested we try again with a new Scheme.

The Practice Statement Letter (PSL) outlines the details of the New Schemes and we encourage you to thoroughly read through the information provided.

What has Amigo done differently?

Amigo is committed to providing creditors (including customers) with the best possible outcome. We want to make sure our New Scheme proposals are better than before; and have improved customer involvement and understanding. The details of the New Schemes have been guided and negotiated with a group of Amigo customers called the Independent Customers’ Committee. 

This is made up of eight randomly selected volunteers from past and present borrowers and guarantors, together with an independent Chair with considerable experience in financial services. The Committee has been offered the opportunity to get independent advice paid for by Amigo and has negotiated the New Schemes’ terms. By doing so, we believe that our customers’ voice has been heard and represented through the New Schemes.

What is the New Business Scheme?

The New Business Scheme includes both a ‘Preferred Solution’ and a ‘Fallback Solution’. The reason for this is that there are two specific events that must happen in the Preferred Solution for business (i.e. future lending) to continue. These specific events are called the Conditions (set out below).

The success of the ‘Preferred Solution’ under the New Business Scheme depends on Amigo returning to lending, under an improved business model with new products for customers offering increased flexibility and affordability. 

It has been named the ‘Preferred Solution’ as it was the preferred route forward negotiated by the Independent Customers’ Committee and will provide the most cash compensation for customers with valid claims, which will be shared with the FOS. However, for the Preferred Solution to go ahead, there are certain conditions that Amigo must meet:

  • 1. Amigo starts lending again within 9 months of when the New Business Scheme is approved (which requires that the FCA is satisfied that the firm can recommence lending); and
  • 2. Amigo raises at least £70m of finance from investors within 12 months of when the New Business Scheme is approved (this money will partially fund further payments of £15m to redress creditors under the Preferred Solution)

If Amigo doesn’t achieve both Conditions, we will follow a plan to wind-down the business. This plan is called the ‘Fallback Solution’. Under the Fallback Solution, Amigo’s business will be wound down, meaning outstanding loans will be collected over time. We will pay off our bonds and operating costs, and then money left over will be used to pay redress creditors and the FOS. There is no set cash amount for redress creditors in the Fallback Solution.

What is the difference between the Wind Down Scheme and Insolvency?

While there are some similarities between a wind down and an insolvent administration, the key difference is that our existing management would continue to retain control of the management of the business in a wind down. In an administration we would appoint an external administrator to run the business. This would be someone with expertise in the financial services sector and who is also a licensed insolvency practitioner. 

We are hopeful that both creditors and the Court approve the Preferred Solution under the New Business Scheme, as it is what the Independent Customers’ Committee and our Board both think is the best option for creditors (customers due redress). However, if this is not possible, a Wind Down Scheme would also result in greater returns to creditors than entering an insolvent administration.  

How do customers approve the New Schemes?

At a future date, after the first Court date (the convening hearing), customers will get the opportunity to vote on whether they want either Scheme to go ahead or not. Further information and resources will be available on the Scheme website for customers to read before they make their decision on how they would like to vote. The most important document to read will be the ‘Explanatory Statement’. Customers will be notified when these further materials are available and will be told how they can access them. 

Customers will be able to vote on both the New Business Scheme and the Wind Down Scheme at the same time, and each Scheme will have its own separate vote. This means customers will be able to vote independently on both Schemes. For example, a customer could vote in favour of the New Business Scheme but vote against the Wind Down Scheme. Customers could also decide to vote against both New Schemes.

We don’t know the exact timing of when this vote will be yet, it is likely to be held in mid/late-April. You will be contacted nearer the time with further details if the Court gives us permission to call the creditors’ meetings to vote on the New Schemes.

Why is there more money available now than the Previous Scheme?

In our Previous Scheme, part of the proposal was that we offered up to £35m to pay redress customers. In comparison, we are now able to propose £97m, if the Preferred Solution under the New Business Scheme goes ahead. There are three main reasons why we are able to offer more:

  • 1. In the Previous Scheme we assumed we would be applying a higher level of balance adjustments and that these would have been implemented by this time. Because that did not happen, and we continued to collect payments from customers, our level of cash collections has been higher than we forecast.
  • 2. The impact of Covid has not been as severe as we had previously forecast and more customers have been able to continue to repay their loans to us.
  • 3. As we have more money available due to the above factors and have not resumed lending, we are able to pay off some of the debt that we owe on our bonds. This means that we can save the cost of future interest on these loans. This additional saving means there is more money available to put into the Scheme.

Which Scheme will give the most compensation to customers?

We believe that the New Business Scheme will provide customers with the greater returns for their valid claims, if we are able to meet the Conditions. This is partly because the finance raised from new lending will provide more money to pay to customers and the FOS.

What happens if neither of the New Schemes are approved?

If neither of these New Schemes are approved by customers, through the creditors’ vote, or the court, then Amigo will go into an insolvency process - most likely administration.

In this situation, the wind down of Amigo’s business will be controlled by an external administrator and we believe that the returns to redress customers will be less than in either of the New Schemes.

Can I claim through the Scheme now?

Not yet. Only if either of the New Schemes are approved by the creditors and the Court will you be able to submit a claim. We'll keep you up to date on the progress and let you know if and when and you can submit a claim.

Redress claims

I want to make a claim

While it is possible for you to make a claim (or a complaint) to Amigo now, you should be aware that we will not be able to progress that claim until it is clear whether a Scheme has been approved. If a Scheme is approved, then your claim will be assessed under the terms of the Scheme. 

If you do choose to go ahead and make a claim to Amigo now, please also be aware that unless Amigo expressly acknowledges receipt of your claim and confirms that it will be included in the Scheme without you needing to do anything further, then you will also need to resubmit the details of your claim in full as part of the claims submissions process in the Scheme.

Please see a timeline of the Scheme events by clicking here. This timeline shows when we expect you to be able to make a claim in the Scheme.

How will I submit a claim?

You’ll be able to submit your claim online, if the Scheme proposals are approved by creditors (creditors include customers that believe they have a valid claim) at the creditors’ meeting, and then afterwards by Court.

Amigo will provide more information to all customers on submitting a claim at a later date.

How will you assess my claim?

We’ll look at your information at the time the loan was paid out, in addition to any supporting information you provide with your claim, which will be assessed against an affordability methodology. If we find that the loan should not have paid out as it was unaffordable, or that your claim is otherwise valid where it does not relate to affordability, you will have a valid claim in the Scheme.

If we require additional supporting information to assess your claim in the Scheme, we will contact you using the contact details you provide on the Scheme website.

What happens if I have already made a complaint to you?

If you have already made a complaint and before 21 December 2020:

i). you had your complaint upheld by Amigo or you had accepted a settlement offer from Amigo; 

ii). you had received a settlement offer from Amigo dated on or after 21 June 2020, which you did not accept or reject; 

iii). you have been told that Amigo had accepted an opinion issued by an adjudicator or investigator at the Financial Ombudsman Service (FOS) in respect of your complaint (FOS "opinions" may also be referred to as "views", "initial assessments" or "provisional assessments” and may be in writing or not); or 

iv). you had obtained a final decision in your favour from the FOS and Amigo had not notified you that it intends to ask a court to review that decision:

you will not be affected by either of the New Schemes and will be paid the amount specified in the settlement offer, FOS adjudicator's opinion or FOS final decision in full. Unless you also have a different claim, you do not need to take any action under the New Schemes. Most of these customers have already been paid, but if you have not please contact us so we can speed up that payment.

If however you have made a complaint but do not fit into any of the instances described above, your complaint will be dealt with under the Scheme if it is approved.

How do we calculate the estimated pence in the £1 (p/£) returns for redress claims, for example the 42p/£ in the New Business Scheme?

The amount of redress that would be paid to creditors can only be estimated, as we won’t know how many customers will make a claim, or how many of those claims will be valid until these claims are actually made and assessed in the Scheme.  However, we have estimated the amounts based on what we do know, together with assumptions based on our experience to date, response rates seen in other similar schemes and guidance from our advisors.

The estimated p/£ returns in our Schemes is calculated by:

A. The total cash available in the Scheme; divided by,

B. The estimated total cash value of valid claims (see below for how this is calculated)

The estimated total cash value of valid claims (B) is calculated by multiplying the following:

o    the total number of claims we estimate will be received

o    the proportion of those claims which we estimate will be valid

o   the estimated average cash redress amount per customer

More detail of the expected numbers is below but, in summary, in the New Business Scheme, the total cash available is £112m (A) and the cash value of valid claims is estimated at £270m (B).

Therefore, A ÷ B = approximately 42 pence per pound of claim.

For those that would like a little more detail on these numbers please see our Supplementary information section below.

What does p/£ mean?

The pence in the pound (or p/£ abbreviation) represents the proportion of cash redress that will be paid to you for every £1 that your claim is worth. As an example, if you are owed £500 and the cash redress is 42 pence in the pound, then you will be paid £210. 

That is £500 x £0.42 = £210

Supplementary information

We included some assumptions around our complaints provision when we published our financial results for the first half of our financial year. Our results can be found here.

  • Estimated future claims to be received        81,6000
  • Estimated proportion of those claims that will be upheld         65%
  • Estimated average redress payment due:   £4,500 (plus any compensatory interest due on that amount)

We have estimated that from our complaints provision of £344m there will be balance adjustments and other items which will be paid in full and will therefore not be due a cash redress payment  in the scheme.  Therefore, the value of valid claims where cash will due in the scheme is currently estimated to be £270m, including amounts due to the Financial Ombudsman Service.

In addition, in the financial results for the first half of our financial year there is a section called our ‘Consolidated Financial Statements’.  In Note 2 of our Consolidated Financial Statements, we provide a further sensitivity analysis around the effect on the key assumptions referred to above (for example: volumes, uphold rate, and average redress).


Can guarantors vote on the Schemes?

Yes. Both borrowers and guarantors, past and present, are able to vote on the Schemes if they believe they have a valid claim. They can each vote independently, both votes count separately and they don’t need to vote the same way. For example, a borrower may vote in favour of the New Business Scheme but their guarantor might vote against it.

Borrowers and guarantors will also both be able to make a claim for compensation at a later date, if a Scheme is approved. We encourage all customers to vote on the Schemes, as the outcome will impact any customers who are owed compensation. 

The process for voting will be exactly the same for both borrowers or guarantors.

Can someone vote on my behalf?

A borrower or guarantor can choose to vote directly, or nominate a third party to act as their proxy and vote on their behalf. This will all be arranged on our voting portal, during the voting process. 

If a third party wishes to vote on behalf of a customer that is unable to nominate a proxy, for example, by reason of some form of incapacity, then we will be able to accept these votes as well. We will however also need to see evidence to confirm that they are authorised to act on behalf of that customer.

Do I need to use an adviser, often known as a Claims Management Company (CMC), to vote for me and make a claim for compensation?

No. The process has been designed to be simple for customers to complete and we don’t think there is any additional benefit to be gained from using a CMC.

If you decide to use a CMC, please make sure you understand the services they are offering and how much their involvement will cost you before agreeing to its service.

Still have a question? Whilst we cannot reply to individual questions, we welcome you to submit a question to us here.

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