Amigo dodges £73m fine from City watchdog due to ‘financial hardship’
The Financial Conduct Authority (FCA) brought its investigation into Amigo to a close by announcing it was publicly censuring the lender for the failings that led to a “high risk of consumer harm”. The regulator said it would have hit Amigo with a £72.9m fine, but said this would have caused the lender “serious financial hardship”. It added that a penalty would have threatened Amigo’s ability to pay out compensation to customers under a High Court-sanctioned scheme of arrangement.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Amigo failed to assess properly the affordability of its lending, especially to vulnerable consumers, as our rules required. This led to lending that was unaffordable for some and meant guarantors had to step in. It also had the effect of prioritising the firm’s commercial interests over the obligation to comply with the rules and safeguard customers from unaffordable loans.”
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Hide AdHe added: “The firm proposed a scheme of arrangement as Amigo could not afford the sizable redress bill in full.
“Following intervention by the FCA, the scheme was ultimately approved by the creditors, including the affected customers, and by the court. The scheme aims to ensure an amount of redress is paid to affected customers that is better for customers, in these parlous circumstances, than any other likely outcome.”
Danny Malone, chief executive of Amigo, added: “I would like to apologise again to any customers impacted for the past failings in lending practices that occurred during the period 2018-2020. As a new board and management team, we fully accept the lessons that needed to be learned for the future.”
He added: “The conclusion of this investigation enables us to draw a line under these historic lending issues as we seek to secure the capital required for the future.”