Amigo investigated over its ‘creditworthiness’ process
The guarantor lender revealed that regulator, the Financial Conduct Authority (FCA), is probing it over the way it handled applications, specifically relating to the way it assessed customers’ creditworthiness.
Subprime lender Amigo offers high interest loans of up to £10,000 to people with poor credit history, allowing them to name family or friends as guarantors.
As part of Amigo’s regulatory update, it stated: “On 29 May 2020 the FCA commenced an investigation (the “FCA Investigation”) into whether or not Amigo’s creditworthiness assessment process, and the governance and oversight of this, was compliant with regulatory requirements. The FCA Investigation will cover the period from 1 November 2018 to date.”
Amigo temporarily suspended new lending activity in March, except for loans to key workers in exceptional circumstances.
And in January, Amigo put itself up for sale as it launched a strategic review amid “a challenging operating environment”.
Richmond Group Limited, which owns a 60.66% stake in Amigo, kicked off the formal sales process and today it was confirmed that it is in ongoing discussions regarding the terms of any offer with a potential buyer.
It stated: “Amigo will provide further updates as appropriate, however there can be no certainty that any offer will be forthcoming nor as to the terms on which any offer will be made.”