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Amigo Loans - Added Interest
Hello,
Just short of 5 years ago I was unfortunate enough to be in a position where I needed £5,000 and the only thing available to me was a guarantor loan through Amigo Loans.
I was sent an illustration showing £5,000 over 60 months = 60 payments of £197.62
I signed & sent the form, the £5,000 was credited to my account on 11th April 2013, and I received a letter stating "Today we paid out your loan. Your repayments of £197.62 will be collected from your account on the 30th of each month starting in May 2013"
I set up the direct debit as instructed and have been making the monthly payments on time ever since.
Yesterday I noticed on my statement that the settlement figure shown was considerably more than the 6 x £197.62 payments I had left.
When I enquired, I was told that 5 more monthly payments had been added to the loan, so instead of my last payment of £197.62 being in April 2018, 4 more would be due and a final payment of £80 in September 2018. (Totalling over £870 extra)
I was told the reason for the extra payments was due to additional interest because my initial loan payment wasn't made within a month of the money being credited. (Even though the first payment was made on the date requested.)
I have checked, and in the T's & C's of the loan it states "To calculate the APR, the total interest, and the total amount you will pay we've assumed that you make your first payment one month after the loan is paid out"
I obviously didn't notice this gem amongst the small print, and I certainly didn't question the first payment date they gave me, get my calculator out and realise it would cost me an extra £870 at the end of the loan!
I have raised this as a complaint with them asking for the figures on the loan to be amended to reflect the original illustration.
In the meantime I have spoken to a solicitor and the FCA who both advise that this isn't right and along with their 'first payment date' I should have received an updated illustration.
If the figures on the loan aren't amended I have a case ready for the ombudsman, but I wanted to post here to see if anybody can point me to any specific legislation that says that Amigo Loans should have sent an amended illustration along with their first payment date?
Before I get any lectures about using these type of companies, 5 years ago I was close to bankruptcy due to a divorce and other matters beyond my control, but I instead chose to take responsibility, pay off my debts and repair my credit rating. I knew the APR on this loan, and I accepted it and stuck to the monthly payments. I have worked 12 hour days 6 days a week for the last 5 years, paid off debts, and repaired my credit rating.
After 5 years of this, with just the light at the end of the tunnel to keep me going, to be told that I have effectively been tricked out of £870 is soul destroying!! Yes I know you are supposed to read the small print but companies with a consumer credit licence are supposed to present figures clearly aren't they??
Thanks
Just short of 5 years ago I was unfortunate enough to be in a position where I needed £5,000 and the only thing available to me was a guarantor loan through Amigo Loans.
I was sent an illustration showing £5,000 over 60 months = 60 payments of £197.62
I signed & sent the form, the £5,000 was credited to my account on 11th April 2013, and I received a letter stating "Today we paid out your loan. Your repayments of £197.62 will be collected from your account on the 30th of each month starting in May 2013"
I set up the direct debit as instructed and have been making the monthly payments on time ever since.
Yesterday I noticed on my statement that the settlement figure shown was considerably more than the 6 x £197.62 payments I had left.
When I enquired, I was told that 5 more monthly payments had been added to the loan, so instead of my last payment of £197.62 being in April 2018, 4 more would be due and a final payment of £80 in September 2018. (Totalling over £870 extra)
I was told the reason for the extra payments was due to additional interest because my initial loan payment wasn't made within a month of the money being credited. (Even though the first payment was made on the date requested.)
I have checked, and in the T's & C's of the loan it states "To calculate the APR, the total interest, and the total amount you will pay we've assumed that you make your first payment one month after the loan is paid out"
I obviously didn't notice this gem amongst the small print, and I certainly didn't question the first payment date they gave me, get my calculator out and realise it would cost me an extra £870 at the end of the loan!
I have raised this as a complaint with them asking for the figures on the loan to be amended to reflect the original illustration.
In the meantime I have spoken to a solicitor and the FCA who both advise that this isn't right and along with their 'first payment date' I should have received an updated illustration.
If the figures on the loan aren't amended I have a case ready for the ombudsman, but I wanted to post here to see if anybody can point me to any specific legislation that says that Amigo Loans should have sent an amended illustration along with their first payment date?
Before I get any lectures about using these type of companies, 5 years ago I was close to bankruptcy due to a divorce and other matters beyond my control, but I instead chose to take responsibility, pay off my debts and repair my credit rating. I knew the APR on this loan, and I accepted it and stuck to the monthly payments. I have worked 12 hour days 6 days a week for the last 5 years, paid off debts, and repaired my credit rating.
After 5 years of this, with just the light at the end of the tunnel to keep me going, to be told that I have effectively been tricked out of £870 is soul destroying!! Yes I know you are supposed to read the small print but companies with a consumer credit licence are supposed to present figures clearly aren't they??
Thanks
0
Comments
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When you signed the agreement, rather than an illustration, they should have sent you an exact terms of payment (Interest rate, number of payments, the payment amount etc), taking into account the first payment date that they sent.
Did they? If not, then you have a case to send to the FOS.
In debt and looking for help? Look here for the MSE Debt Help Guide.
Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.0 -
Before I get any lectures about using these type of companies, 5 years ago I was close to bankruptcy due to a divorce and other matters beyond my control, but I instead chose to take responsibility, pay off my debts and repair my credit rating. I knew the APR on this loan, and I accepted it and stuck to the monthly payments. I have worked 12 hour days 6 days a week for the last 5 years, paid off debts, and repaired my credit rating.
If you ever get into this situation again of needing to use a guarantor loan from a sub-prime lender ask the person who is willing to be guarantor to apply for a loan in their own name with a normal lender with you making the payments. As the reality is they're effectively the ones applying for a loan anyway with a Amigo when they're a guarantor then the risk to them is no more or less but you would pay 1/5th to 1/10th the interest.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
I concur with stopit. Indeed have they not been sending annual statements which clearly show what paid and the end date etc0
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Thanks for the replies.
No new terms of payment was ever received, I only signed & returned the original one stating 60 payments.
Nothing was ever sent saying "because we set your first payment date 6 weeks after money was credited the loan will now be 65 payments and you'll have to pay an extra £870"
They gave the first payment date after I had signed and returned the original terms showing 60 months.
Statements have been sent every month however, which would have shown the extra interest, but I only just noticed it now, as the remaining balance added up to more than the 6 payments I thought I had left.
Surely just noticing now doesn't mean I've been had & it's too late?0 -
Complain.
See what they say.
If you don't like their response complain to the FOS.0 -
This must be a warning to people considering amigo loans. £5000 of credit will cost you over £12000!
If your guarantor had got a loan at 3% and given the money to you it would have only cost you £5385!!
£7000 interest vs £385!!!0 -
Keep paying (you'll find your credit history will be screwed if you don't), however as others have said, complain and go all the way to the FOS if necessary.2.88 kWp System, SE Facing, 30 Degree Pitch, 12 x 240W Conergy Panels, Samil Solar River Inverter, Havant, Hampshire. Installed July 2012, acquired by me on purchase of house in August 20170
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This must be a warning to people considering amigo loans. £5000 of credit will cost you over £12000!
If your guarantor had got a loan at 3% and given the money to you it would have only cost you £5385!!
£7000 interest vs £385!!!
My friend tried to get one of these with me as guarantor and I nearly had a coronary when I saw the interest!!SPCNo.20 #20 (19 £2914.12; 18 £1752.64; 17 £562.86; 16 £678; 15 £1120.92; 14 £416.53; 13 £191.52; 12 £260.48; 11 £480.95; 10 £682.31; 9 £442.64)0 -
MrsShazbat wrote: »My friend tried to get one of these with me as guarantor and I nearly had a coronary when I saw the interest!!
What happened then ?
Did you find another way to get the funds ?
Or tell the friend you couldnt help ?0 -
Hello,
Hi Seawead
My partner has just been hit with the identical scenario you posted about last year. Just wondering whether you were successful with any complaint/appeal to the ombudsman. We have raised the issue already with Amigo with no joy and intending to take it further. Thanks Sleapycat.0
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