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Block Amigo scheme to cap compensation for customers, FCA urged

Sumary of Block Amigo scheme to cap compensation for customers, FCA urged:

  • Consumer campaigners are urging the government and the City regulator to intervene in a rescue scheme proposed by the sub-prime lender Amigo, saying it could enrich the firm directors while some of Britain poorest borrowers miss out on up to £1bn in compensation…
  • They have called on the Financial Conduct Authority (FCA) to block plans to limit redress payments to nearly a million current and former customers who were potentially mis-sold unaffordable loans by Amigo, which is the most complained about financial lender in the UK…
  • Consumers who lodge successful complaints to the financial ombudsman typically receive payouts that leave them in the same financial position as if they had not received the loan…
  • Its own examples suggest payouts could be worth anywhere between 10 and 23% of the total value of the loan, but refunds could be much lower depending on how many customers lodge successful claims…
  • The consumer credit division of Provident Financial said on Monday that it would go to court to ask for a similar deal to the one Amigo has proposed, allowing it to cap compensation at £50m…
  • “I would call on the FCA to intervene, to make sure a fair and proportionate balance of the money available from Amigo for redress is given back to customers, who have often had their lives made very difficult by being mis-sold hideous, over-expensive loans.”..
  • Five Amigo executives would receive long-term bonuses that combined, would be worth at least £7.3m if the share price hits the target price of 40p per share in three years’ time and stays at that level until the time the awards are paid at the five-year mark:..
  • Amigo is the UK largest provider of guarantor loans, which use friends and family to guarantee repayments on loans to people who might otherwise struggle to borrow….

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