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The FCA has publicly censured Amigo Loans Ltd for failing to conduct adequate affordability checks on borrowers and guarantors.
The FCA would have imposed a fine of £72,900,000, however Amigo demonstrated that this would cause it serious financial hardship. A fine would also have threatened Amigo’s ability to meet its commitments to a High Court-sanctioned scheme of arrangement, which aims to pay redress to customers.
Between 1 November 2018 and 31 March 2020, Amigo did not have appropriate processes in place to ensure it adequately assessed borrower and guarantor circumstances before approving a loan. Amigo’s failures led to a high risk of consumer harm, both to borrowers and guarantors.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: 'Amigo failed to assess properly the affordability of its lending, especially to vulnerable consumers, as our rules required. This led to lending that was unaffordable for some and meant guarantors had to step in. It also had the effect of prioritising the firm’s commercial interests over the obligation to comply with the rules and safeguard customers from unaffordable loans.