Adrian Hargrave, CEO of SEEEN, explains how the new funds will accelerate customer growth Watch the video here.
Honewood, that’s not strictly true. If the £15m rises to £35m, that will be because Amigo hasn’t spent the provision on balance adjustments.
And it will only transfer 38.85% of the underspend, to a MAXIMUM of £20m. So if £20m gets transferred from the balance adjustment pot to the payout pot, the minimum underspend on balance transfers would be over £50m, the balance of which Amigo proposes to keep for itself instead of ensuring all of the provision goes to fund valid complaints.
In my view, this is another shameless tactic to deprive customers of what they’re validly owed and another example of the imbalance between customers and shareholders / execs which I think undermines Amigo’s claims to treat all stakeholders equitably. I think this is the kind of thing that would irritate FCA who will have to justify their response to the proposals.
Wibi, no doubt the shares have taken a hit. But that’s the nature of investing. Investors buy and sell according to movements and updates and they vote for the management (several times). Nobody’s holding in terms of number of shares has been diluted - or will be under the scheme.
Seamus, I get you. And as I understand, every penny of an upheld loan will be paid back. It’s only the I nterest is returned when a complaint is upheld. Seems fair for an upheld complaint that the borrower pays back what they’ve borrowed (and spent) but Amigo doesn’t get to profit from high interest costs on a loan that it shouldn’t have given. Of course there was no gun to the head. Even so, Amigo doesn’t dispute that it owes this money to customers.
Craigyboy, no I don’t intend to buy in as things stand. My gut still tells me the odds are against the scheme in its current form. Even if it does pass as it stands, I think it’s very unfair to customers with valid complaints and it would be wrong to give Gary and Mike such a large bonus scheme off the back of capping off liabilities that all other firms (rightly) have to pay. That’s not for me, even if it’s a multibagger.
The main scenario in which I’d buy back in is if the scheme is redesigned to share the pain more equally between customers, shareholders and execs. Not only would I be more comfortable with that personally, I happen to think that would be best outcome for shareholders too because a fairer scheme would be more likely to pass.
Yes, I know I’ll get a hard time if this version of the scheme does pass and I’ll be here to take the flak if that happens. But I don’t think any of what I’ve said about the problems with the scheme is wrong.
We will have different views on whether £15m / 15% is fair. I think it’s an insulting proposal for customers without a live loan. That’s an individual judgment call.
But I haven’t heard a convincing reply to the unfair competition or the FCA reputation argument.
I was a fairly lonely voice in being anti-Benamor and his “up to 20p” purchase promise so I’m used to being in this position. But I think I was ultimately proved right on that. We’ll see whether I’m right on this.
As ever, this is only my view. Do your own research and make your own decisions.
Craigyboy, I’m still here. Genuinely pleased for all that the SP has had a good week. It looks to me that Bybrook has gone long but I’m confused why they went for CFD and not direct stock purchase.
Bybrook’s decision (assuming it is long) hasn’t changed my view on the fundamentals of the scheme. There’s no change to the scheme design (so I still think it’s an absolute stinker) nor an announcement on FCA opinion (so I still think it’s unlikely to win FCA around):
- How can FCA allow one firm to cap redress / FOS fees so massively (maybe a 95% discount on payouts?) while Amigo’s competitors continue to be fully liable? This would be unfair competition.
- The scheme is imbalanced, setting up big payouts for execs and shareholders by inflicting significant losses on mistreated customers with valid claims. A low pence in £ would not be good for FCA next to nearly 15 million bonus shares that are on the table for execs. If SP exceeds £1 in next three years (which I don’t think is unlikely if complaints costs are capped and fair lending resumes), two men get MORE than the entire pot for writing cheques to customers without a remaining balance! That would be a disgrace, especially when FCA is already struggling with fallout from customer losses in LC&F scandal.
- Not objecting to the scheme carries huge reputational risks for FCA given there’s an ongoing investigation into poor lending practices and now a threshold conditions review. Will other firms ever take FCA regulation seriously if it doesn’t object?
- There’s also the unknown of how watertight Amigo 2.0 is, but I don’t think that is a particular worry. I think they’d get that right.
I expect Gary to make a lot of positive noise about Bybrook on Thursday - especially if they continue to buy long. But other people’s buying / selling decisions aren’t relevant to me (remember Neil Woodford).
I want new news. So I’ll be listening for any updates about the scheme itself and updates about ongoing FCA dialogue (not only on scheme, but also investigation, threshold conditions and s166). That’s what’s key for me.
On balance, and even though this goes against recent SP moves, I still think the odds are against the scheme in its current form. But we will see.
Please note: This is a personal view. Please do your own research and take responsibility for your own buying and selling decisions. Thanks.
I’ll take it that as an admission that no such wording appears on debt camel.
Classic example of the way myth becomes truth on this board and people believe and write what they want to rather than what’s real.
Mike - you ask “do the people who prefer amigo go into administration not care about the people who would recieve nothing?”
I don’t prefer Amigo to go into administration. I prefer them to get some balance into the scheme, increase the amount available for valid complaints (at the expense of shareholders, bondholders and executives) and come through the other side.
But as a shareholder who, if the scheme does succeed will make a substantial return, do you not care about the customers who will probably lose 95 - 98% of their entitlement under the same scheme? It’s amazing to me that a few pennies in the pound for customers can so easily soothe your concern for their gigantic loss.
Soundsrisky - again, I did not say I had posted on other financial services boards. I said I held shares in other stocks. I have not met Sarah or even spoken to her.
If you’re going to use this board to talk about me instead of Amigo, at least get it right.
Vagabond, thats some very selective reading of my post!
I’m very negative about the scheme. My post says that, as things stand, I definitely don’t intend to buy in.
But of course, in the unlikely event that the scheme was redesigned in a way that resolves my concerns, of course I would consider buying back in. I was a holder until October!
Mike, in administration, people with an outstanding loan AND a valid complaint will get the FULL value of their claim knocked off the loan balance, which could wipe some people’s loans.
See paragraph 12c:
https://www.amigoscheme.co.uk/practice-statement-letter
I wouldn’t unless the scheme changes to make it more equitable. If that does happen (and assuming no further negative news about threshold conditions or FCA investigation or problems with Amigo 2.0) I’d almost certainly buy in anywhere up to 20p and maybe even higher.
If all these problems are fairly sorted (which I also think would be in shareholders interests too), I think Amigo 2.0 has a great future and even at 20p - 30p, there’s good scope for significant returns.
Evidence of what XEL?
I AGREE with debt camel (regarding the Amigo scheme)
I AM NOT debt camel
I think you’d be better served coming to terms with the realities of the uphill battle the scheme faces instead of deflecting from that with your obsession about whether I am Sarah from debt camel or Mr Magic or Uncle Tom Cobley.
Let’s discuss the issues!
PAD, I’ve spoken positively about Amigo 2.0. But Amigo 2.0 can’t happen without the scheme. And I think the scheme is deeply unfair on a whole number of levels.
I think we may all be guilty of confirmation bias. I try to be open to seeing things another way but I find it easier to change my mind if people support their assertions with evidence.
My opinion is that the scheme is so loaded in favour of shareholders and bosses at the expense of customers, would give Amigo such an unacceptable advantage over its competitors, and would send such a loose regulatory message about the consequences of systemic compliance failures that I cannot see how the FCA can avoid opposing it.
But of course I might be wrong!
Traveller - way way too much spotlight. We can definitely agree on that. I have never resorted to personal attacks or insults though.
I don’t flatter myself that my posts could do anything to the share price, even if I wanted to get back in. But anyway I’ve also said I won’t buy back in if the scheme isn’t amended to make it much fairer to complaints.
XEL - I’ve already answered your questions about Mr Magic. This is the only profile I’ve ever had or used. Now you can find something more interesting to post about - like what’s going on with Amigo, maybe?
Cardinal - care to be specific about my which of my comments were libellous?
GrimRip - PA went beyond setting out an opinion and claimed to have first hand knowledge of developments not in public domain. That’s why I reported it and the moderators agreed with me.
IF the scheme gets passed, I’ll be here and of course I’ll have to acknowledge that my judgement regarding the likelihood of it passing was wrong.
But I will always find it hard to accept that this scheme - putting all the pain on customers, protecting shareholders and bondholders, and setting up Gary and Mike for a multi million pound payday - is fair. My view is that, as currently proposed, the scheme deserves to be rejected. That’s unlikely to change even if it does somehow manage to avoid being opposed by FCA.
PAD, I don’t think drawing a comparison between two high cost lenders who have both been swamped with affordability complaints is so ridiculous. But I’ve already acknowledged that there are some differences between Amigo and Brighthouse that I hadn’t considered. What do you want - blood?