Problem with Amigo Loans Direct Debit Indemnity

pvt

magpiecottage wrote: »

On what authority do you base this statement?

Amigo are quite cute in that they pay the loan amount to the guarantor, for the guarantor to pass on. They do this to ensure the guarantor fully comprehends the risk they are taking.

I think MarktheShark may therefore be correct in saying the principal is the guarantor.

Look at the situation where Amigo pay the guarantor, but the guarantor does not pass it on - Amigo would have no claim over the original applicant.

BrassicWoman

pvt wrote: »

Amigo are quite cute in that they pay the loan amount to the guarantor, for the guarantor to pass on. They do this to ensure the guarantor fully comprehends the risk they are taking.

I think MarktheShark may therefore be correct in saying the principal is the guarantor.

Look at the situation where Amigo pay the guarantor, but the guarantor does not pass it on - Amigo would have no claim over the original applicant.

the borrower still completes a loan agreement

the guarantor can still get a judgement in court if they can show they passed the money over

the fact this is a 2nd loan supports the guarantors version of events

as does the paying of instalments for more than one month

~Brock~

The direct debit indemnity scheme is woefully out of date.

It was introduced at the same time as direct debits themselves, back in the mists of time when, as a new and untested service, the public needed some reassurance that there was something to fall back on after giving DD originators a mandate to take 'unspecified' amounts from their bank accounts.

Back then, however, it was relatively unheard of for consumers to 'game' the system by fraudulently invoking the scheme even when nobody had done anything wrong.

Nowadays the opposite is true, and it seems socially acceptable to evade debts in ever more imaginative ways, and as always the system seems to facilitate this whilst taking years to catch up.

Whilst it is theoretically possible for me to claim back the mortgage payments I have made for the last 20 years, I know that if I did so then I would be homeless within a short space of time....therefore I won't do it, apart from the fact that as a responsible adult I know the meaning of a contract between two parties.

Guarantor loans however represent a different proposition because I would know that the problem is passed to the unsuspecting guarantor, which in my eyes is a big failing on the part of the system.

Until a more common sense set of rules is in place (don't hold your breath) this type of scenario will continue to happen I'm afraid.

magpiecottage

pvt wrote: »

Amigo are quite cute in that they pay the loan amount to the guarantor, for the guarantor to pass on. They do this to ensure the guarantor fully comprehends the risk they are taking.

I think MarktheShark may therefore be correct in saying the principal is the guarantor.

Look at the situation where Amigo pay the guarantor, but the guarantor does not pass it on - Amigo would have no claim over the original applicant.

If MarktheShark is correct then I think FOS would take the view that Amigo should have had to make it explicitly clear to the OP was not a really guarantor at all but simply borrowing the money in his own name and that his "friend" had no liability at all.

Failure to do this would mean that the terms of the loan did not meet the requirement to be clear, fair and not misleading.

What particularly concerns me is that it says here "If you’ve been asked to be someones guarantor you should’ve been given an “amigo.me” link. Just enter it below to go to guarantee their loan…"

That does not seem to me to be a remotely adequate.

If so, I suggest a complaint to complaints@amigoloans.co.uk in the first instance that they failed to properly explain the risks to you in a manner that was clear, fair and not misleading - and in particular that if the borrower reclaimed all direct debits they would come after you for the entire debt. This meant you had no way of monitoring the debt and ensuring the borrower maintained payments.

Consequently you consider that they have acted irresponsibly and that they should rectify the problems they have caused you.

If that fails you can go to FOS. I cannot guarantee this will work but it is free to try.

bearcat16

Good loans Amigo loans! Always good fodder for MSE discussion.

As has been said on MSE forums many times before, you might as well take a loan out yourself (at a decent interest rate, not Amigo's 50% apr) and then lend that to your friend, because the way Amigo work is that they practically consider the debt to be with the Guarantor, not the penniless amigo.

You should pay them to avoid damaging your own credit history, then argue about it.

And as for your 'amigo', box his lugs.

Herzlos

I suspect the original borrower has some liability; but it's just much easier for Amigo to refund the DD and seek the money from the guarantor.

Which is why guarantor loans should be avoided at all costs.


Your best option is to take out a loan at a good ratee, pay off Amigo and break your "friends" legs. Or talk to his mrs before filing a small claim.

You can also report the fraud to his bank as you hopefully still have evidence that he made those payments willingly.. It's unlikely to get you your money back but it'll make the small claim action easier

stator

Sorry but you need proper legal advice, not MSE "advice"

Marktheshark

Still so many people that quite simply do not understand what a Guarantor is.
When you are a Guarantor, it is YOUR loan, they give someone else the money and will let them make payments.
If the person you Guarantor does not pay, the Guarantor must and will.
There is no other liability, there is no miss selling and there is nobody to complain to.

You act as Guarantor = you pay if they dont.
It stops there, nothing to add on, no threads or strings to pull.

Could you sue the friend, yes, if they defend and legal beagles will write him a water tight defence you lose.
If they dont defend, you get a CCJ and as they dont have any money and a long history of not paying any debts, good look getting a penny.

The time for all this is when you sign the deed of guarantor.
You enter trust law, it is set as hard as concrete in foundation and case law itself.
Don't ever Guarantor a loan, people that lend money have access to information you dont, you have to take friends at face value, people that lend money go on "track record" called a credit history.

We could talk morals, but moral advice wont help the OP, he will be paying Amigo all of the money owed or defaulting himself.
If you own property, that is not somewhere you want to be.

It has to be drummed out, this is a money saving site and you can save yourself money by not guaranteeing any loans you are not prepared to pay back in full.

antrobus

Marktheshark wrote: »

Still so many people that quite simply do not understand what a Guarantor is....

No, it's you that doesn't understand what a guarantor is.

For example;
A guarantee is a promise by one party (the guarantor) to another party (the guaranteed party) to be responsible for the due performance of the obligations of another party (the principal) to the guaranteed party if the principal fails to perform such obligations.


and therefore


The liability of a guarantor is dependant on the underlying obligation of the principal to the guaranteed party. This is known as the principle of co-extensiveness.

https://www.lexisnexis.com/uk/lexispsl/bankingandfinance/document/391289/55KB-65S1-F185-X16G-00000-00/Guarantees+and+indemnities%E2%80%94overview

Your assertion therefore that the 'friend has no liability' for the loan is complete and utter nonsense. Because if that was the case, then the guarantor would have no liability either.

antrobus

magpiecottage wrote: »

....If so, I suggest a complaint to [EMAIL="complaints@amigoloans.co.uk"]complaints@amigoloans.co.uk[/EMAIL] in the first instance that they failed to properly explain the risks to you in a manner that was clear, fair and not misleading - and in particular that if the borrower reclaimed all direct debits they would come after you for the entire debt. This meant you had no way of monitoring the debt and ensuring the borrower maintained payments.

Consequently you consider that they have acted irresponsibly and that they should rectify the problems they have caused you.

If that fails you can go to FOS. I cannot guarantee this will work but it is free to try.

I believe that there might be some mileage in taking that route.

As a matter of law, the OP has been well and truly stuffed; as the guarantor they are left in the position of having to cough up the money to Amigo and then seeking to recover their losses from the friend, who is now nowhere to be found.

The FOS however operates under the principle of 'fairness', and may well therefore provide some relief to the OP.