We want to keep you updated following the court decision on our proposed Scheme of Arrangement. We understand how it can seem confusing and we know customers have feelings of frustration and uncertainty right now, but we’d like to assure everyone that we are working hard behind the scenes to come to a decision on our next steps. As soon as we have more information we will update our customers.
A recent letter to customers
Last week (week commencing 6th June 2021) we wrote to over 140,000 customers asking them to complete a short survey. The survey was designed to gather thoughts and opinions on the ongoing situation with Amigo and the Scheme of Arrangement (Scheme) process.
We wanted views from a representative sample of customers who voted on the Scheme, both for and against, and also those who did not vote at all. We contacted a random selection of customers, and not everyone, so that we were able to efficiently analyse and evaluate the responses.
That being said, if you did not receive a survey from us then please don’t be concerned. We’d like to assure everyone that we value all customers' thoughts and opinions, and believe we have received a fair and representative view through this outreach.
Why did we do this?
Following points raised by the High Court judge, we wanted to improve engagement with our customers regarding the Scheme. We also wanted to capture their current understanding and any feelings on the situation. Thank you to all those who engaged with the survey.
What did the email & survey include?
The letter from our CEO, Gary Jennison, acknowledged the current situation and aimed to explain what this meant for customers.
The questions asked in the survey were around the outcome of the High Court judgement and the further delay to a final decision being made. We also wanted to understand if customers believed that another Scheme would provide them with the best possible outcome for any valid claims for compensation. A final question asked about how customers would want to receive further updates and information regarding the ongoing process.
How are we using the customer responses?
We will be using these collective responses to inform our internal discussions on next steps and tailor our future communication, ensuring we are providing customers with relevant information in a way that they want.
What’s happening now?
Following the Court’s judgement not to approve our proposed scheme, and our decision not to pursue an appeal, we are discussing with the Financial Conduct Authority (our regulator) what we should do next. The judge suggested that we should try to amend the scheme and we are trying to do what he asked. Although going into an insolvency process is a real possibility, we are looking to see if a different Scheme of Arrangement might be possible.
Background on the Scheme
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 employees, IT providers and landlord) that would need to be paid before customers with a valid claim.
Why did Amigo have to go to court?
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.