This is a copy of the email being sent to Amigo customers (at 25/6/21):
We understand that you did not vote on Amigo’s recent proposed Scheme of Arrangement (Scheme). We’d like to take the opportunity to apologise if you felt there was insufficient information or a lack of communication from us in the past, especially around the Scheme. This is a key action for us to fix as a priority, starting with the following information.
Amigo continues to face a situation where there is a real possibility of us entering into an insolvency process. Following the High Court’s decision not to approve our proposed Scheme, and our decision not to pursue an appeal, we are discussing with our regulator, the Financial Conduct Authority, what we do next. The judge suggested that we should try to amend the scheme and this is one option that we are considering.
Given this, we are actively considering what a different scheme of arrangement could look like and thought it might be helpful to provide some further information in relation to why Amigo proposed a scheme. This should help you understand its relevance for you, and our other past and present customers. We have summarised the key areas and it should only take a few minutes to read.Warm regards,
What is a Scheme of Arrangement?
A scheme of arrangement is a court approved process which aims to provide a solution if a company can’t pay all its debts.
Why did Amigo propose one?
Amigo proposed a scheme in light of the large number of customer complaints regarding irresponsible lending. These complaints were submitted in the hope of getting compensation. Compensation may be given to a customer if their complaint is a ‘valid claim’. Amigo does not have enough money to pay compensation for all the valid claims and would therefore go into an insolvency process. If Amigo was to go into insolvency, there would be no cash left for customer compensation. This is because there are other creditors (such as our bondholders, employees and IT providers) that would need to be paid before customers with a valid claim.
That being said, we believe a scheme is the best way for Amigo to be able to provide fair and equal cash compensation for customers.
Gary, our Chief Executive, provides a little more detail in this short video, just click here.
For further FAQs regarding the Scheme, please see our dedicated Scheme website.
How would you know if you have a valid claim?
A valid claim means a customer would have sufficient reasoning and/or evidence that they were provided with an unaffordable loan, at the time it was paid out.
Why did Amigo have to go to Court and why was it not approved?
Schemes follow a legal process and in order to progress, the Amigo scheme needed to be passed by first; the creditors (Amigo customers, past and present, and the Financial Ombudsman), and then the High Court. All potential claimants (any customer with a valid claim) were given the opportunity to vote on the Scheme and 95% were in favour of the Scheme going ahead. However, the Judge decided to not approve the Scheme as he did not think we had provided sufficient information to creditors to decide how to vote.
What does this mean now?
The judge advised that Amigo should try to find an alternative, which could include a new scheme. The board of Amigo continues to consider all options and we will continue to engage with the Financial Conduct Authority (FCA) to identify an appropriate way forward.
Our recent customer survey, sent to a representative sample of over 140,000 past and present customers, confirms that further delays have brought feelings of frustration and disappointment. We are really sorry to hear this and are working hard to ensure we can give further clarity soon. For more information on the customer survey, you can read our blog here.
Please do not reply to this email, if you have any questions or comments you can get in touch via email@example.com