Amigo Guarantor receives loan

Options
Chas54
Chas54 Posts: 3 Newbie
in Loans
Hi I am new to this forum.
I volunteer for a debt advice charity and have recently come across a situation which is new to me and my colleagues. Basically the client took out an Amigo loan, it seems that they, Amigo, for “anti fraud” purposes now pay the money to the guarantor, not the client. In this case the guarantor has not passed on the loan and has gone incommunicado. The client however is being pursued by Amigo, whose attitude to this can be best summed up as “not our problem”. Has anyone come across this and has any advice for our client?
«13

Comments

  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Options
    I think Amigo have always paid the loan to the guarantor so that the guarantor has to physically hand the money over to the borrower. If your client can't/won't pay Amigo the money then Amigo will just come after the guarantor because that's the whole point of having a guarantor.

    I assume that as your client had to resort to Amigo that his/her credit history is already pants otherwise they wouldn't have touched Amigo with a 10' bargepole. What real harm could them not paying Amigo do?
  • Comms69
    Comms69 Posts: 14,229 Forumite
    Name Dropper First Anniversary First Post
    Options
    The client could also go to small claims court to try recover the money (not recover, cover doesn't sound right, ill go with 'get')
  • Samsung_Note2
    Samsung_Note2 Posts: 774 Forumite
    Options
    Pixie5740 wrote: »
    I think Amigo have always paid the loan to the guarantor so that the guarantor has to physically hand the money over to the borrower. If your client can't/won't pay Amigo the money then Amigo will just come after the guarantor because that's the whole point of having a guarantor.

    I assume that as your client had to resort to Amigo that his/her credit history is already pants otherwise they wouldn't have touched Amigo with a 10' bargepole. What real harm could them not paying Amigo do?

    But wouldn't Amigo update the person who applied for loan credit file,making it worse than prior to loan.

    Not the biggest deal n the world admittedly,but could scupper there chances of getting the Credit file back to a decent level.

    If unpaid is it just the guarantor who gets pursued or both parties...ccj and the such.
  • System
    System Posts: 178,102 Community Admin
    Photogenic Name Dropper First Post
    Options
    Chas54 wrote: »
    Hi I am new to this forum.
    I volunteer for a debt advice charity and have recently come across a situation which is new to me and my colleagues. Basically the client took out an Amigo loan, it seems that they, Amigo, for “anti fraud” purposes now pay the money to the guarantor, not the client. In this case the guarantor has not passed on the loan and has gone incommunicado. The client however is being pursued by Amigo, whose attitude to this can be best summed up as “not our problem”. Has anyone come across this and has any advice for our client?

    If the client doesn't pay then the guarantor will then be pursued. It would seem the guarantor is quite a stupid person and doesn't quite understand that they're liable for the loan as much as the applicant.

    The client needs to contact the police. Only with a crime number is Amigo likely to do anything.

    Some advice for you. If one of your clients is thinking of getting an Amigo loan and they have someone who is willing to be the guarantor then tell them it would be far better to ask the guarantor if they'd be willing to get a loan out in their own name with a mainstream lender. It would leave the guarantor in no worse a situation or more risk than if it was an Amigo Loan but it would mean that the borrower would only repay around £12000 on a £10,000 instead of £21,000. This would almost halve the monthly repayments leading them to be less likely to get into further trouble.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Options
    Samsung_Note2 wrote: »
    But wouldn't Amigo update the person who applied for loan credit file,making it worse than prior to loan.

    Any non-payment would be reported to both the borrower's and the guarantor's credit files.
    Samsung_Note2 wrote: »
    Not the biggest deal n the world admittedly,but could scupper there chances of getting the Credit file back to a decent level.

    If someone has resorted to using a guarantor loan with a horrific APR then (s)he is already about 6 years away from having the type of credit history that makes her or him an appealing prospect to high street lenders.

    I will go further and say that someone who resorts to this type of borrowing is probably already on the cusp of a DMP or some form of insolvency anyway. What's one more lender in the mix?
    Samsung_Note2 wrote: »
    If unpaid is it just the guarantor who gets pursued or both parties...ccj and the such.

    Both parties are legally liable for the debt and Amigo can and will pursue both. It might jolt the guarantor into paying back the money although I suspect that if they're the type of person to steal from a friend/family member then they won't give two hoots about defaulting.
  • dresdendave
    dresdendave Posts: 889 Forumite
    First Anniversary Photogenic First Post
    Options
    Looking at it from another perspective, perhaps the guarantor has only just realised the implications of being a guarantor and is now loathe to hand the money over to someone who is almost certain to default on their repayments.
  • Chas54
    Chas54 Posts: 3 Newbie
    Options
    Interestingly, we and other centres have come across clients who have had the loan paid direct. Don’t know if it’s a new thing.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    It's not.

    It's a strange reversal of events though to see the guarantor screwing the borrower.
  • Chas54
    Chas54 Posts: 3 Newbie
    Options
    I thought that the guarantor must be bit stupid because, as has been pointed out, Amigo could pursue them. The client’s real worry is that if they don’t pay Amigo have threatened an attachment of earnings order. They are some way from that yet as they haven’t been to court, which could be interesting, as Amigo cannot prove that they paid the client the money. Anyway thank you everyone for your thoughts, we would never advise clients to take out an Amigo loan for all the reasons given.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Options
    Chas54 wrote: »
    Interestingly, we and other centres have come across clients who have had the loan paid direct. Don’t know if it’s a new thing.

    It’s not a new thing.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.6K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.7K Work, Benefits & Business
  • 608.7K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards