Man slams lender for selling £20,000 in personal loans while he had £40,000 in debt

A MAN has criticized disgraced lender Amigo for selling him £20,000 in personal loans when he had £40,000 in debt.

John Mackenzie, from Northern Ireland, has revealed how the loans led him to financial ruin.

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The local entrepreneur borrowed a whopping £24,000 in high-interest loans from Amigo Loans in 2016.

The company, founded by James Benamor, lent money to people with bad credit scores.

All users needed was a friend or family member who could guarantee refunds if they couldn't, earning a minimum of £800 per month.

John claimed the payments were unaffordable and has now condemned the company for “destroying his life”.

The 49-year-old told the Email online: “All I want is mine money back, so I can pay off my debts and sort out my life.

“If my claim had been settled when I first submitted it, my money would have been refunded with interest.

“Now that Amigo is in administration, they are sitting on that money and I can't afford to live.”

The Financial Conduct Authority has permanently banned Amigo from granting loans in 2022.

It alleged that the company had failed to carry out proper affordability checks on borrowers.

'They didn't care'

Thousands of Britons were left with little chance of repaying their loans.

And Mr Mackenzie was left with as much as £40,000 in debt after his company fell on hard times.

He received four loans from the company after his sister-in-law agreed to stand surety for him.

John fumed: 'They didn't care what I earned. I was self-employed, they knew my debts and they still made the decision to borrow.”

John couldn't keep up with the payments and seeing his money evaporate from his bank account took its toll.

As a result, his health deteriorated drastically and he lives in fear of seeing his money disappear again.

He added: “Amigo loans have ruined my life and that is not dramatic. I have experienced suicidal events. I was having a hard time. Why was this allowed to happen?

“I take full responsibility for everything I have borrowed, but when things are not right, adjustments and changes are needed.”

He now criticizes Amigo's policy and calls for a ban on guaranteed loans.

ONGOING STRUGGLE

The High Court forced Amigo to return at least £112 million in interest to borrowers it had wrongly sold loans to.

Despite the ruling, Mackenzie said he still has not received a cent.

The company has now gone bankrupt, leaving hundreds of users waiting for refunds.

An Amigo spokesperson said: “To date, Amigo has provided more than 173,000 decisions to customers with claims, representing approximately 82% of the total claims submitted.

“We expected all decisions to be communicated by the end of January 2024, but the complexity in assessing and calculating certain claims, especially for some claimants with outstanding loan balances, has taken longer than initially expected.

“We apologize for the delays in the process and our intention is to publish all responses by mid-March 2024.

“Cash payments cannot be made until we have determined virtually all claims and their value. We will make payments to customers with valid claims as quickly as possible.

“We encourage claimants to visit our website for the latest information and to ensure we have their current contact information.

“Amigo was founded with the aim of providing credit to people who would otherwise be excluded by the major lenders.

“Our priority now is to complete the orderly liquidation of the company and provide the maximum level of recovery to eligible claimants.”

After a thorough investigation, the FCA decided to censure Amigo for failing to implement adequate affordability checks.

Executive director of enforcement and market supervision at the FCA Mark Steward said at the time: 'Amigo has failed to properly assess the affordability of its lending, especially to vulnerable consumers, as our rules required.

“This led to lending that was unaffordable for some and meant that guarantors had to intervene. It also resulted in the company's commercial interests taking precedence over its obligation to comply with regulations and protect customers from unaffordable loans.

“The company proposed a settlement because Amigo could not fully pay the extensive compensation. Following intervention by the FCA, the scheme was ultimately approved by creditors, including affected customers, and by the court.

“The scheme aims to ensure that affected customers are paid an amount of compensation that is better for customers, in these dire circumstances, than any other likely outcome.”