Complaints have been rising at loan firm Amigo Loans as the company looks set to miss its targets set by regulators.
The firm was tasked with clearing a backlog of approximately 9000 complaints by 26th June, as agreed with the Financial Conduct Authority (FCA).
Amigo agreed to set aside £35m to settle the complaints which by the time they entered into the agreement with the FCA on 27th May, were over eight weeks old. Rather than clearing the backlog and bringing the number of complaints down however, the volume of complaints have risen substantially since 8th June.
The lending firm is also under investigation by the regulator for its lending practices. In an announcement on 1st June to the stock exchange, Amigo explained that they were being investigated by the FCA as to whether its process for credit checking borrowers met regulatory requirements.
Amigo loans is a firm that specialises in offering loans to borrowers with a poor credit history providing they have the backing of a strong guarantor, meaning the type of loans the company provides already carry a degree of risk.
The additional cost of the complaints received after 31st March 2020, which marks the end of the firm’s financial year, is expected to be significant. It’s expected that the FCA will offer the firm an extension to the deadline to clear the backlog of customer grievances with Amigo already in discussions with the regulatory body to find a solution.
Amigo has pledged its commitment to clearing the backlog in a way that’s fair to customers, with some worried that the deadline would force the company to rush through the process. The firm however has said it will continue to assess each complaint on a case-by-case basis in order to ensure fair outcomes for its customers.
The firm is expected to publish its full year results for the year end 31st March 2020 on or before 23rd July 2020.