By Huw Jones
LONDON, March 3 (Reuters) - Complaints about guarantor loans
by companies such as Amigo soared last year, eclipsing
grievances over payment protection insurance (PPI) that have
dominated for more than a decade, Britain's Financial Ombudsman
Service (FOS) said on Wednesday.
Consumers have turned to loan providers since last March as
lockdowns to fight the COVID-19 pandemic strained their
finances.
"For more than a decade, the Financial Ombudsman Service
received an unprecedented number of complaints about PPI. We're
now seeing thousands more complaints about credit - including
about guarantor loans," FOS said in a statement.
Guarantor loans require a friend or family member to
guarantee they will take on repayments if the borrower falls
behind. Complaints about this type of loan reached more than
10,000 in October to December, up from just over 300 in the same
period a year before, the FOS said.
Complaints about other types of home credit jumped to over
6,000 from 430 over the same period.
The complaints about consumer loans usually focused on
inadequate affordability checks, FOS said.
Amigo describes itself as Britain's leader in guarantor
loans. FOS said complaints about the company totalled 12,854 in
the second half of 2020, up from 1,163 in the first half.
Amigo said it launched a scheme of arrangement, or
court-approved compensation process, in January after receiving
a high number of complaints last year.
"We are a new leadership team that wants to correct past
mistakes in a way that is fair and equitable to all our
customers – including our 700,000 past borrowers and
guarantors," Amigo said in a statement.
Provident Personal Credit Ltd was the second most complained
about company, with 10,390 complaints in the second half of
2020, FOS said. Provident had no comment.
PPI became Britain's costliest retail financial scandal that
dominated FOS work until the final deadline for complaints
passed in August 2019.
(Reporting by Huw Jones; editing by Barbara Lewis)