Another Amigo loans thread!

cmumx3

A family member was talked in to acting as guarantor for her niece. Niece more or less defaulted within first 6 months and the guarantor has been paying it for the past 2 years, still has 3 years to go, guarantor is not working and in their late 70's, now struggling to pay their basic bills.

I assume that amigo loans is almost like a joint loan that if the guarantor stops paying their credit rating will be affected, but does the loan company go back to the original borrower for the repayment or straight to the guarantor. The guarantor is adamant she didn't actually sign a loan agreement and did'nt know the interest rates. She asked for a copy of the loan agreement and where her name is is just a typed cross. Obviously she initially agreed to be guarantor while talking to amigo loans on the phone and the loan was paid into her account but would she have to sign it to make it legally possible for them to come after her and not the name of the person the loan is in?

[Deleted User]

They can go after either party, once payments are no longer being made.

They're not going to release the guarantor from their obligations, unfortunately. It sounds as if they have given her a copy of a reconstituted agreement, as well as the fact she admits to receiving the money.

She has the option of defaulting, with the associated impact on her credit files and subsequent collections activity, but that may be a price she is willing to pay. She could ask about a repayment plan to reduce the collections activity.

Paul_DNAP

I think the "it's not valid without ink on paper" is a very weak argument to try and make, especially in the internet-based age.
Also, she had a telephone conversation where she agreed to do this, that will be recorded and available for them to present as evidence she entered into this willingly.
The "not knowing about it fully" clause will probably be also covered by that phone call, the Amigo representative will have had a key questions on the script which will determine that she knew exactly what her responsibilities were. Also, that would have been an ideal time to determine any questions such as the interest rate, the terms etc. (If she truly has agreed to something she didn't understand then that is really her issue and there is no fault from Amigo who entered into it assuming she was being truthful on the phone.)
Also just to note that the Amigo loan isn't really a "joint loan" - the guarantor is the main borrower, with the third party only being there to receive the funds and (try to) repay it. If the guarantor fails to pay, it does not go back to the other party, it goes to a debt collection phase, technically for either or both parties, but usually the guarantor is the only one worth chasing as the other party probably has nothing to pay with and possibly a string of other debts with prior claim etc. This is completely legal and your relative will have agreed to this during the application phase.


On the up side, Amigo may be open to renegotiation of the terms, if a default is the only other option, so talk to them.

Exodi

From a legal standpoint, all of what you said is above board. It's far-fetched of you to think every contract requires a signature done in person for it to be valid; by that logic, no-one needs to pay their household bills anymore. It's also a bit of stretch to proclaim that she suddenly became unaware of what she was signing up for 2+ years on. I typically see a common trend in threads like this (and there are a LOT of them) where guarantors take their anger out solely out on the lender and avoid placing any on the original debtor (mostly because it's easier).

If it's the case that she'll inevitably default, is there any remediation that can be done with the niece? If she stopped paying it because she lost her job, she's surely found one 2+ years on.

Lastly, I would completely remove from your head the illusions that this is a 'joint loan' - they will only pursue and enforce against the guarantor.

foxy-stoat

cmumx3 wrote: »

AThe guarantor is adamant she didn't actually sign a loan agreement and did'nt know the interest rates. She asked for a copy of the loan agreement and where her name is is just a typed cross. Obviously she initially agreed to be guarantor while talking to amigo loans on the phone and the loan was paid into her account but would she have to sign it to make it legally possible for them to come after her and not the name of the person the loan is in?

Normal procedure is to pay the guarantor then the guarantor pays the "friend" who promises to pay the loan. I doubt the lack of paperwork will stand up anywhere as all the guarantor has to do is say I didnt receive it and the loan is un-enforceable.

Look on their web site, it is very clear what happens and what it means to be a guarantor.

You are better off getting the cheapest credit you can to clear the loan off and release the poor sap who agreed to guarantee the loan, then go after to "friend" who make them sign up to it.

Good luck but this type of thing never ends well.

John_G_Jones

cmumx3 wrote: »

AObviously she initially agreed to be guarantor while talking to amigo loans on the phone and the loan was paid into her account but would she have to sign it to make it legally possible for them to come after her and not the name of the person the loan is in?

No, no need for a signature.

The money was paid into her account, she didn’t pay it back, she passed it on.

I’m afraid that her niece has stuffed her, as Amigo pretty much knew that they would. Best option from her now is to see if she can raise the money elsewhere at a lower rate of interest or from savings and to repay the loan immediately.

Mobeer

Looks like there would have been some initial on-line paperwork and a (likely) recorded phone call to your family member:
https://www.amigoloans.co.uk/be-a-guarantor

sourcrates

Err, yes there is a need for a signature, a credit agreement cannot be executed without one.

This from Amigo:

“How do I guarantee a loan?
You can either sign and return the paper forms we sent to the borrower, or enter your “amigo.me” link above and complete the online registration.”


If they didn’t sign the loan agreement, or complete online, but the company still paid out the money anyway, then they cannot be asked to guarantee the loan, simple as that.

Without a signed credit agreement the money was a gift.

John_G_Jones

sourcrates wrote: »

Err, yes there is a need for a signature, a credit agreement cannot be executed without one.

This from Amigo:

“How do I guarantee a loan?
You can either sign and return the paper forms we sent to the borrower, or enter your “amigo.me” link above and complete the online registration.”


If they didn’t sign the loan agreement, or complete online, but the company still paid out the money anyway, then they cannot be asked to guarantee the loan, simple as that.

Without a signed credit agreement the money was a gift.

You do real,harm by inventing anything that you think will help you to encourage people in trouble to default.

https://www.scl.org/news/3037-consumer-credit-and-online-signatures

https://blogs.lexisnexis.co.uk/content/restructuring-and-insolvency/signing-on-the-dotted-line-i-accept-button-constitutes-a-signature-under-consumer-credit-act-1974

https://www.michalsons.com/blog/electronic-signature-of-credit-agreements/12564

sourcrates

sourcrates wrote: »

If they didn’t sign the loan agreement, or complete online.

John_G_Jones wrote: »

You do real,harm by inventing anything that you think will help you to encourage people in trouble to default.

See above for what I actually said.

It’s very likely the guarantor ticked the tick box online.

Windbag66

John_G_Jones wrote: »

You do real,harm by inventing anything that you think will help you to encourage people in trouble to default.

Causing trouble again are we John, ‘‘twas only yesterday you were advising people to take out high interest pay day loans, can’t wait for your next peal of wisdom........