Guarantor lender Amigo Loans expects to increase its complaints provision to £150m from £116m, a complaints update shows.
In accordance with the terms of the Complaints Voluntary Requirement to deal with the complaints, made with the Financial Conduct Authority (FCA), Amigo has published a complaints update revealing its overall number of complaints has remained higher for longer than the lender expected.
As of 20 October 2020, Amigo had reviewed and reached a decision on all of the 25,571 complaints included in the voluntary requirement. The lender said it is yet to issue the final responses to customers on 2,517 of those complaints.
Of those outstanding complaints yet to receive a final response, 2,209 related to a specific group of complaints where significant guarantor payments on a loan have been a feature. The guarantor lender added that the methodology for calculating redress for this specific group is being discussed with the FCA.
Amigo said it is working with a third party to collect the necessary remaining information for the remaining 238 cases, to calculate the redress due.
During the three months to 30 September 2020, Amigo settled around £47m of redress to customers.
Gary Jennison, chief executive of Amigo, said: “While operationally we have turned a corner with complaints, the sustained volume we are seeing will have an impact on the complaints provision going forward. We have placed the provision under review and a full update will be provided at our half year results.
“Working with our regulator to fix the complaints situation is our number one priority and this is non-negotiable. We will be back lending to our customers that need to access an Amigo loan as soon as we can, but do not envisage this being before 2021.”