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Given Franky has filtered me, can anyone point me to independent info about these Maltese CMCs?
Franky may well be right that the system stinks from top to bottom, which begs the question why he has invested. I saw the error of my ways and sold up months ago.
The answer in many cases is that shareholders seem to think they have an entitlement to guaranteed profits no matter how they are delivered and who else has to pay. This is despite the vast majority of shares having been bought by retail investors SINCE Amigo’s irresponsible lending problems emerged.
If anyone bought at IPO, they could’ve seen at that time how Amigo had aggressively expanded its loan book in the couple of years prior. They took their chance anyway and they could’ve sold up at anytime since. Share price drops are not a loss of equity.
How’s that for free market anti-socialist principles, Mousekewitz?
Strongwoman. All parts of Provident group involved in the Scheme (“CCD”) will be wound up. See
https://ir.design-portfolio.co.uk/viewer/26/18630
Vanquis and Moneybarn continue but are separate businesses, not part of the scheme.
See also https://www.theguardian.com/business/2021/may/10/provident-financial-to-close-doorstep-lending-business-after-141-years
Cookie - “I would guess 80% of claims are customers jumping on the bandwagon, total horse **** claims”
Amazed people comment - let alone invest - without knowing the facts. See section 2.3.2 of Amigo’s results document. The uphold rate is 65% - so it expects to agree with TWO THIRDS of complaints.
See for yourself:
https://amigoloans.cdn.prismic.io/amigoloans/2b776c9c-fe21-40ec-8232-743bede94b1e_Results_Amigo+Holdings+PLC+FY+Results+-+24+August+2021+-+FINAL.pdf
strongwoman - Provident have done their scheme as part of winding up. Amigo want a scheme AND to carry on trading. That’s why FCA has approached them differently.
Cjmarritt - it’s not me saying scheme 1 didn’t affect shareholders. It’s the FCA and the court (and I agree with them). Scheme 1 did not dilute shareholders or expect them to contribute funds to the pot. Falls in share price is not the same as equity dilution or rights issue. And where I come from, profit is revenue minus costs. If Amigo avoids paying 90% of its costs by failing to honour what it owes customers, then I don’t regard it as having made profits by any standard definition. The judge recognised Gary’s proposals for what they were - an unfair transfer of value from creditors to shareholders / execs that runs counter to the hierarchy in insolvency. The next scheme needs to address those points and ask shareholders to make a contribution.
Franky, you’re dancing on the head of a pin. For every £1 Amigo owed customers, scheme 1 sought to pay them 10p and to prevent them bringing complaints after six months. You call that “limiting” liabilities, I call it avoiding them. Same difference.
Cjmarritt - if you don’t understand why giving loans to people who can’t afford them isn’t ok, there’s no hope. Go read the FCA website and rule book.
Franky, Amigo’s actions are now well known and by the firm’s own calculations, have taken over £350m out of the pockets of the same vulnerable customers it claims to exist to help. You point me to a cmc that has inflicted similar losses on its customers, and I’ll call that malpractice too.
Mousekewitz - It shows a staggering lack of self awareness to call me a socialist whilst arguing that Amigo should be allowed to carry on trading having dodged more than £300m of what it owes.
Capitalism means allowing firms to fail when they can’t stand on their own two feet. Are you up for that?!
IK - there’s nothing in what I wrote that defends poor CMC behaviour. Of course CMC misbehaviour is not right.
Here’s the bottom line. Amigo ADMITS it owes customers an estimated £350m. The FOS has been upholding 80 or 90% of cases. When a firm get things that wrong, CMCs will inevitably be attracted and they may well drive complaints that would otherwise not have been made, some upheld and some not. That’s a cost of malpractice on this scale.
New management team does not - and should not - enable Amigo to avoid its liabilities to customers, especially not while leaving execs and shareholders unaffected.
Cjmarritt - that’s totally irrelevant. What you are saying is that firms should be able to indulge in harmful practices on a systemic basis and then have the slate wiped clean simply because a new management team is put in place. Totally ridiculous position - where does that stop? It’s the legal entity that’s liable, whichever individual(s) are at the helm and that’s exactly how it should be.
Cookie - another tired argument. Amigo has provisioned £350m for genuine, VALID complaints from customers that it acknowledges are owed redress. It simply doesn’t wash to say the complaints are from chancers. Anyone who denies that amigo has got things wrong on a massive part of the problem - not least because without recognition of what’s gone wrong, it’s very unlikely FCA will authorise lending starting again.
Yes, they are different.
- Buddy isn’t the subject of two FCA investigations
- Buddy isn’t planning to deprive customers of their redress and carry on trading with lucrative exec bonus plans
- Buddy didn’t pursue an aggressive expansion of its loan book ahead of an IPO
https://www.fca.org.uk/news/news-stories/advancis-ltd-enters-administration
Also interesting - Buddy offers same interest rates as Amigo - FCA describes it as a high cost lender.
I have no view on what this means for Amigo. Will FCA want Amigo to sink after NSF and Buddy stop lending? Or does this show FCA prepared to see failing lenders collapse?
Tinsel, even Gary now (finally) admits that Amigo got a lot of things wrong in the past (a rather different message to his first video as CEO). What is there to debate?
Say what you like about FOS / FCA, you can’t apply new rules retrospectively. If FOS or FCA have done that, they’d be extremely vulnerable to challenge. Yet neither Amigo, nor any of the many collapsed lenders, has challenged what they’ve done in court, in spite of all the insolvencies, the redress bills and the losses this has caused.
So however much lenders (and their shareholders) protest about moving goalposts, the collective failure to challenge the regulators tells me these lenders know they have been caught red handed.
I think a better explanation of why all this has emerged since IPO is that the firm pursued an over-aggressive strategy to expand the loan book in order to maximise the value of the IPO. That strategy has since been exposed as catastrophically reckless and deeply harmful to borrowers. Shareholders were party to that and must not be protected at the expense of creditors.
Strongwoman - as you don’t seem to grasp it, you don’t rack up a £345m liability to customers (who Gary himself is at pains to recognise as being financially excluded) without having well and truly taken the **** out of them.
Relax, Strongwoman! I only answered a question.
I hope Gary means what he says about being customer focused in future. I’ve seen precious little of that so far from Amigo, including under his management.
Under his watch, Amigo’s scheme was found to be misleading to creditors and skewed towards shareholders (of which he is one). Another 4.35 million shares was made available yesterday for unnamed managers below board level. After the scheme was announced, he agreed an individual LTIP worth 9.5 million shares to him alone. All whilst he tells the Sunday Times a maximum of £35m will be made available to creditors against a £345m estimated liability. At least Provident has had the decency to shut itself down.
Snowboots - salaries are on page 79
https://www.amigoplc.com/investors/annual-report-2021
When you add Nayan’s £667k payment in 20/21 to Gary’s £600k salary and Mike’s £330k salary, three directors between them are taking home more than 10% of the £15m the scheme made available for the 1million customers contacted by Amigo.
That’s before the additional millions in executive LTIPs.
Absolutely disgusting.
Cardinal - “MP's & other stakeholders will be livid especially and my understanding is that MP's are already aware of FCA recent actions in the 1st hearing and the devastating affect it will have on their constituents, if Amigo goes bust.”
This is one of the more outlandish posts I’ve read - and that’s saying something. Can you quote any actual MPs or the vaguely defined “other stakeholders” who are livid at how poor little Amigo is being treated?
In case you hadn’t noticed, Amigo hasn’t been lending for the best part of 18 months. So if Amigo goes bust, absolutely nothing changes for consumers. I haven’t noticed the sky falling in or MPs jumping up and down about how what their constituents need right now is easier access to high cost credit.
Not sure there’s much read across. Provident Personal Credit has launched its scheme as part of a wind down of its home credit arm. Amigo wants to carry on trading.
Ensuring fair allocation of value is what concerns FCA in Amigo’s case but doesn’t apply to Provident.
JWD -
An “investigation” into whether a customer was telling the truth in their loan application and could actually afford the loan is a great idea! Maybe amigo could start doing it BEFORE they provide loans to people? It could be called something really novel like, maybe, an “affordability check”…
As for shareholders not being diluted, what’s your reasoning? Have you read the judgement and the FCA letter of concerns? If Amigo decide not to dilute shareholders, they’re flying in the face of the direction they’ve been given. Shareholder dilution is in shareholders’ best interests because the alternative is wipeout in insolvency. No dilution surely makes FCA objection / court rejection much more likely.