(Alliance News) - Subprime lender Amigo Holdings PLC on Monday said it is in talks with the UK Financial Conduct Authority to extend the deadline to clear its backlog of customer complaints, as it has "continued to see a substantial increase in the rate of complaints".
Shares in the Bournemouth, England-based company were down 27% at 7.17 pence each in London.
In May, the company had agreed a voluntary requirement, or VReq, with the FCA to work through and reach a decision, before the end of June, on a backlog of complaints.
The VReq was intended to clear a backlog of around 9,000 complaints that would have been aged eight weeks and over as at June 26, the date the VReq was due to be completed.
The cost of clearing the backlog of complaints was estimated at least GBP35 million and possibly "materially higher". Due to the complaints cost, Amigo was forced to cancel its final dividend for the financial year ended March 31.
Amigo on Monday said it is in talks with the FCA to extend the date of completion of VReq "beyond June 26 and a corresponding expansion of the backlog of complaints to be resolved".
The additional cost of complaints received subsequent to March 31 is expected to be material, as a result of the substantial increase in the rate of complaints received, the company added.
Amigo expects to publish its results for the recent financial year around July 23 .
By Tapan Panchal; tapanpanchal@alliancenews.com
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Amigo (AMGO)