City watchdog will not oppose Amigo rescue plans in boost for firm’s survival
The City watchdog has announced it will not oppose new rescue plans for beleaguered sub-prime lender Amigo Loans, after it blocked a proposed compensation scheme for customers last year.
In a statement today, the Financial Conduct Authority (FCA) said the fresh plans laid out by the lender were an improvement on those submitted in 2021, which were thrown out by the High Court after the FCA objected to the amount of compensation people would receive.
The new plans will enable Amigo Loans customers who were mis-sold loans to receive up to 41p in the pound in compensation.
“The firm’s Scheme represents an improvement on last year’s failed proposal and has the support of the Independent Creditors Committee, which was set up to advance the interests of those customers owed redress,” the FCA said in a statement.
“If the Scheme is sanctioned by the Court, the FCA has confirmed that the firm could resume lending if it meets certain conditions.”
The FCA said it does not “intend to attend the hearings to oppose its proposals”.
Amigo has faced a drawn-out dispute with the high court over a compensation scheme for customers, after it was found to have offered irresponsible guarantor loans with an interest rate customers would never have been able to pay back.
Amigo customers who think they were mis-sold loans will now have a chance to vote on the new plans at a creditors’ meeting next month.
Shares in the London-listed firm Amigo are trading up over 10 per cent today following the news.