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FCA tells Amigo Loans to better explain risk to guarantors

The Financial Conduct Authority (FCA) has told guarantor loans lender Amigo Loans it must more clearly explain the risks to people when they agree to act as a guarantor for a friend or family member.

It comes after the regulator undertook a review of Amigo to “better understand the role of guarantor”.

 

The review focused on the information made available to potential guarantors and how sufficient this is to ensure potential guarantors reach an informed decision ahead of becoming a guarantor.

 

The feedback Amigo received from the FCA has not raised concerns with the guarantor loan product itself, nor made comments about its underlying business model, the lender said.

 

In a statement to the London Stock Exchange, Amigo said the review identified areas where its customer journey could be enhanced, including “increasing the explanation of key information provided to potential guarantors” and increasing disclosure on the likelihood that guarantors could be called to make payments.

 

Amigo chief executive Hamish Paton said: "We are grateful for the significant amount of time and effort that the FCA has committed to the Review and we take on board all of the improvements they have identified. These will be good for customers and other stakeholders, and further reinforce our strategy of doing the right thing for all our borrowers and guarantors."

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