What is a Scheme of Arrangement (Scheme)?
- A Scheme is a Court-approved process which, in this case, will allow customers with a valid claim to receive cash redress payments that are distributed in a fair, equitable and efficient manner.
- Customers (both borrowers and guarantors) will be invited to vote on the Scheme proposals by the date of the Scheme meeting 12th May 2021. The Financial Ombudsman Service (the FOS) will also be able to vote on the Scheme. Together, customers and the FOS are called "creditors".
- If creditors approve the proposals and the Scheme is also approved by the Court, customers who believe they have a valid claim for redress will be asked to submit a claim online within six months. Your ability to make a claim for cash in the Scheme will be increased if you vote 'for' the Scheme. If you choose not to vote, you are allowing others to make the decision on your behalf.
Why is Amigo proposing a Scheme?
A Scheme is a mechanism that will require creditor and Court approval, to enable us to fairly and equitably receive and consider all claims related to loans made by Amigo. The purpose of the Scheme is to secure a better return for Amigo's customers than would be possible if Amigo went into insolvency. Should the Scheme not be approved by the creditors, Amigo will go into insolvency and unsecured creditors (including customers with claims for redress) would receive no cash payments.
How will this affect me?
If the Scheme is approved and becomes effective, all claims for redress will have to be handled through the Scheme and if you do not submit a claim by the deadline, you will not be eligible for a redress payment (whether as a cash payment or a reduction in your outstanding balance). Your ability to make a claim for cash in the Scheme will be increased if you vote 'for' the Scheme. If you choose not to vote, you are allowing others to make the decision on your behalf.
What am I being asked to vote on?
- You are being asked to vote 'for' or 'against' the proposed Scheme by 12 May 2021.
- The Creditors' meeting will be held virtually and is currently scheduled to begin at 10am on 12 May 2021. You'll have until the 10th May to vote online in advance of the Creditor's meeting or tell us you want to attend and vote at the Creditors' meeting.
- If you vote 'for', this will enable customers making a valid claim to receive a redress payment in a way that is fair and equitable. This means that the same methodology will be used to value similar claims, and all customers will have an equal opportunity to receive payment for their claims.
- If you vote 'against', that will likely result in Amigo becoming insolvent (and no longer existing), in which case no redress will be available.
How do I know if I have a claim?
If you believe that you were provided with an unaffordable loan(s) by Amigo or if you have any other claim in relation to an Amigo loan, you have a claim. If the Scheme creditors vote 'for' the Scheme you will be able to submit a claim using the Scheme website.
How do I vote?
- Click here amigoscheme.co.uk to go to our website to vote.
- We will shortly contact you with more information about the proposed Scheme. This will include a link to the Scheme website where you can vote on whether you are in favour of the proposed Scheme. Due to the ongoing Covid-19 pandemic, you will not be able to vote in person at the Scheme meeting.
Where can I find my customer reference number?
- Your customer reference is an 8-digit number, also known as an agreement number. You can find this on your loan agreement, online account or in your Amigo app, and in most of the loan communications we've sent to you.
- If you can't find your reference number, or are unsure whether you've found the correct number, you can get in touch with our customer service team at 01202 629798, who will be able to help you.
Why can't I log in to the portal?
- If your customer details are not recognised by the portal, you may not be able to login to the Amigo Scheme website. This will be because we no longer have your personal information on our system; this can be due to a number of reasons including data protection legislation or you previously having asked us to remove it. If you aren't able to login to the online portal, then please give us a call on 01202 629798. One of our agents will ask you some questions about when you were a customer of ours. We will try to match your information with what we are able to retrieve.
- Please note, in some cases we may be unable to match enough customer data to verify your eligibility to vote.
Do I have to vote?
There is no obligation for you to vote on the Scheme. However, we would encourage that you do, so that your views as an Amigo customer are represented, especially if you think you have a valid claim to make.
What happens if I do not vote in favour of the Scheme, or do not vote at all?
If you either vote against the Scheme, or do not vote at all, you will still be entitled to submit a claim in the Scheme if it is approved by the required number of creditors and the Court. If you do not vote on the Scheme, you are allowing others to make the decision on your behalf regarding how your claim will be dealt with (as the decision of the creditors and the Court applies to all creditors, even if they voted against the Scheme, or did not vote at all).
What happens if the vote is unsuccessful?
If the Scheme does not receive enough votes 'for', this means it is not approved by creditors. Amigo will enter insolvency. Any redress claims of Amigo borrowers and guarantors will be classed as unsecured creditor amounts in the insolvency. It is highly likely that in an insolvency, unsecured creditors will not receive any cash payment. Voting 'for' the Scheme will help prevent this from happening.
When will the Scheme meeting be held?
The Scheme meeting (for our customers, past and present, and the FOS) will be held virtually by Video Conference and telephone on 12 May 2021 due to the ongoing Covid-19 pandemic. We estimate that the meeting may take up to five hours and we ask that if you wish to attend, you must register in advance through our website. This is to ensure we can provide for suitable access. If you've let us know you wish to attend the meeting, you will be contacted with attendance details. You do not need to attend the meeting in order to vote. Voting can be done in advance on our Scheme website.
Will the Scheme affect my loan repayments?
You need to continue making repayments on your loan, regardless if the Scheme is approved. The loan terms and conditions remain as agreed when the loan was taken out. The repayments you make and continue to make will be factored into the valuation of any valid Scheme claim that you may have.
What is redress?
Redress is a payment (cash or an adjustment to your loan balance) which may be due to you if you
have a claim against Amigo because you are or have been:
- i a borrower that took out a loan from Amigo Loans Ltd (Amigo) that should not have been made because you could not afford to repay it; or
- ii a guarantor for an Amigo loan and either: (a) that loan should not have been made; or (b) you should not have been accepted as a guarantor because you could not afford to make repayments; or
- iii a borrower or a guarantor of an Amigo loan and you have any other claim that might arise out of, or in relation to, an Amigo loan.
Do I need to use an adviser, often known as a Claims Management Company (CMC), to help me claim compensation?
No. The process has been designed to be simple for customers to complete and so that there is no benefit 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.
Importantly, your ability to make a claim for cash will be increased if you vote 'for' the Scheme. If you choose not to vote, you are allowing others to make the decision on your behalf.
What happens if I have already made a complaint to you?
- If you have made a complaint and have: (i) received a letter from Amigo accepting your complaint; (ii) accepted a written settlement offer from Amigo; or (iii) received a written settlement offer dated on or after 21 June 2020 which you did not accept or reject (e.g. by referring it to the FOS) before 21 December 2020, your complaint will be dealt with outside of the Scheme process, and you won't need to vote on the Scheme proposals or submit the same claim in the Scheme.
- If you have made a complaint but not received a letter from Amigo detailing an amount of redress compensation, your complaint will be dealt with under the Scheme if the proposals are approved by the creditors and the Court.
Your ability to make a claim for cash will be increased if you vote 'for' the Scheme. If you choose not to vote, you are allowing others to make the decision on your behalf.
Can I still make a claim and get redress if I did not vote?
- Yes, all customers (other than excluded creditors) will be entitled to claim redress if the Scheme proposals are approved by the creditors and the Court.
- However, your ability to make a claim for cash in the Scheme will be increased if you vote 'for' the Scheme. If you choose not to vote, you are allowing others to make the decision on your behalf.
What type of claims are covered by the Scheme?
The Scheme applies to any claim that you may have about an Amigo loan made between 28 January 2005 and 21 December 2020.
What is the 'Bar Date'?
The Bar Date is the last date by which you will be able to submit a claim in the Scheme. This is also referred to as the Claims Submission Deadline.
Why is the 'Bar Date' important?
- If the Scheme becomes effective in late-May, we will notify all customers and post a notice on our scheme website. Customers will then have six months from this date to submit a claim in the Scheme.
- If you miss the deadline (expected to be in late-November), you will not be able to submit a claim in the Scheme (even where you didn't think you had a claim before the deadline had passed). Importantly, if you miss the deadline, you also won't be able to benefit from any future balance reduction in respect of a claim that you could have submitted in the Scheme.
What do customers need to do before the Bar Date?
If you think you have a claim, you need to make sure that you submit it in the Scheme before the Bar Date. You can submit your claim through the scheme website at https://www.amigoscheme.co.uk/.
What is the effect on a guarantor under the Scheme where a borrower has a valid redress claim?
Under the Scheme, where a borrower has a valid redress claim, a guarantee will not be enforced, and the guarantor will not be required to make any future payments. This is the case even where the guarantor has not made any previous payments on a loan or submitted a claim in the Scheme.
How does set off work?
'Set off' refers to the amount that will be reduced from any existing balance that you owe to Amigo, if you have a valid redress claim in the Scheme. If your redress claim is greater than any loan amounts that you owe, you will receive a cash payment under the Scheme in respect of the balance of your claim (currently estimated to be about 10%).
If a payment is made to a guarantor under the Scheme, will any of these amounts be added back onto the borrower's account?
No. Any amounts paid to a guarantor under the Scheme will not be added back to a borrower's loan balance.
How will claims be assessed in the Scheme?
- The claims assessment methodology under the Scheme has been subject to review by an independent "skilled person" appointed in consultation with the FCA to ensure that it is consistent with regulatory and legal requirements.
- Furthermore, under the Scheme, if a customer disagrees with the assessment of their claim, they will be entitled to refer the claim to an independent person, called the "Scheme Adjudicator" who will assess their claim under the terms of the Scheme.
What happens if my data has been anonymised?
In order to comply with data protection legislation, Amigo's policy is to anonymise certain customer data for more historic loans. If your data has been anonymised, you will need to provide sufficient information to allow us to identify your account in order to vote on the Scheme. To do this, please give us a call on 01202 629798
Why was 21 December 2020 chosen as the date to stop paying redress claims, and why is this fair to customers?
The formal decision to pursue the Scheme was announced on 21 December 2020. Once this decision was announced, the directors of Amigo were advised that it was no longer appropriate to continue to pay certain claims in full ahead of other creditors who would be included in the Scheme. The decision to stop paying claims ensures that any claims that are not excluded from the Scheme, are all treated equally and fairly.