Member Info for Malpenn

Without lending I am expecting their cash pile to have increased in the same manner as the last update. We will get an update on the expected redress amounts set side but given the FCA extension is now until October I doubt we will get a firm numbers around the number of complaints.

Only two weeks to go until the results are published. I am hoping they are release before the 23rd so they catch out some day traders.

which are expected to be announced on or before 23 July 2020

Does this really sound like a business which was created upon bad practices

https://medium.com/@jamesbenamor/i-started-amigo-in-2005-6b78ed2fb25

Santander charges 40% ARP for overdraft, this business is loaning to subprime customers so there is risk and this needs to be reflected in the interest rate, yes I would like to see a future offering with lower interest but guarantors are required for some home mortgages and car purchases. The model works but the FCA/FOS needs to revisit and work with Amigo to resolve these claims of irresponsible Lending and processes.

Hamish has been hired by Provident and it's very clear that James holds Hamish responsible for the major failures within Amigo in the past year. Maybe read JB blog to gain an insight. Hamish relocated from London to Bournemouth for his job and demanded a relocation cost of £325,000 from Amigo, previous failures at Brighthouse. Glad he is gone !!!

https://medium.com/@jamesbenamor

I can totally understand where PDL companies have been totally irresponsible in their lending practices, a person could have 5 PDL at the same time because no checks were done. These companies went out of business for good reason. Now days you have technologies like Open Banking which give your lender direct access to your bank statements. Amigo couldn't have gone through IPO if they had major holes in their lending practices. What James is share is an insight into what has potentially happened in the past year. Certainly this share isn't straight forward but all we can do is digest the information in the public domain and decide to invest or not.

The cost of the complaints is probably the most important factor when deciding to invest or not. If Hamish has introduced a policy of refunding almost every loan then this can be addressed and therefore we can begin the understand the true cost of the complaints, I certainly expect some valid complaints but it would be great news for shareholders if we thought the high number of complaints being approved was due to internal policy where any form of overdraft use or over use of credit card resulted in the loan being classes as irresponsible. I am overdrawn and don't pay my full credit card each month, this doesn't mean I have been lent to irresponsibly.. I just chose what to pay per month.

Customer had an overdraft which was not cleared in full each month.

This was irrespective of the cost of the overdraft, so a 0% overdraft being used was proof of irresponsibility.

Customer has a credit card which is not paid off in full each month.

As above, irrespective of APR.

I personally audited some of the refunds that were issued. Here’s a list in no particular order of just some of the reasons why customers were issued with full refunds.

These reasons were often the sole evidence for irresponsibility, where all other evidence was to the contrary:

One or two late payments on an account, where that account was otherwise paid on time, and all other accounts were paid on time

Amigo offered a ‘no questions asked’ late payment facility. A borrower could simply text an automated number to defer their payment for up to 2 weeks. There was no cost for this.

Using this facility one, to defer payment 3 days was enough to deem subsequent loans irresponsible.

Hamish’s complaint handling policy since his appointment a year ago has been to totally ignore the I&E analysis that was done.

There was no change in regulation. An FOS complaint adjudicator changed their interpretation of the regulation on a handful of cases in a way which we still believe was unlawful. Hamish then went way beyond this change to implement his own set of changes.

The FCA inspected and gave positive feedback on this I&E process during the section 166 report they commissioned in ‘14/‘15, and again before authorising Amigo.

The FOS regularly adjudicated complaints on affordability screening and due to this thorough I&E process, found in Amigo’s favour almost 100% of the time up to Spring ‘19.

Mr Wilcke will step down as chairman tomorrow and will be replaced by Roger Lovering, Amigo’s senior independent director, on an interim basis. Hamish Paton, chief executive, has agreed to resign at the end of July. Both had agreed to resign last year at the “first suitable opportunity”.

Can't see it being too long now that Glen is onboard in a few weeks..

However, our faith in Glen is very strong, and once we are sure that Stephan Wilcke and Roger Lovering have left the board, we would see a strong possibility that we will reinvest into Amigo and play a part in the turnaround.

A FCA approved business is alot more than clicking a few buttons within the AWS marketplace, yes that gives you a framework infrastructure but the value of the business is in their custom written applications and consumption of services to provide the speed of a new lender making an application for a loan. Everything is driven by software and analytics. This business can't be duplicated within even a medium term timeframe.

I am very surprised that no one else has seen it. Hamish is sent over to Provident, he destroys it. While Amigo rebuilds gets a new rubber stamp from the FCA and Amigo purchases Provident for pence as Hamish has successfully repeated history !!!

We know from the 22nd June there was approximately 9,000 complaints and there has been a substantial increase in the rate of complaints. The FCA/FOS is already under fire regarding the number of payday loan companies that have gone out of business due to complaints and left legitimate claims with a very low pence in the pound redress. While I am certainly not comparing Amigo to a PDL and I am personally please that the PDL market is almost empty of suppliers, the cost that Amigo needs to pay for every complaint that a customer takes to the FOS needs to change. I believe the FOS will charge Amigo ~£550.00 per complaint regardless if it has any merit or not. I would like to see for cases that have no merit and are rejected by the FOS that cost needs to be paid by the person making the complaint, at least then its closing the market for all these Claim Management Companies.

The year end results should provide an updated number of complaints and then I can make take a view about the cash impact to Amigo.

If a current borrower has a complaint upheld I would image that interest is removed and they continue making the capital repayments over the term of remaining loan or repay the capital owed and the loan is ended early but that borrower isn't going to have access to Amigo credit again.

If a borrower is deemed to have lied on their application and making a compliant I believe there is the ability to register a CIFAS entry on their credit file, which shows other lenders of a potential fraud warning. I wonder if Amigo have explored this with the FCA/FOS.

Is there a chance that the FCA will work with Amigo to redefine lending criteria and approve the company starting again when mainstream lending starts again, they did after all approve Amigo's lending practices at IPO and whatever has changed could affect not only the company but those with legitimate claims.

I personally feel similarly to James Benamor

I believe also that Amigo have been removing interest on existing loans where a complaint has been upheld so there isn't an immediate impact on the money in the bank.
For loans which have closed they have been paying out complaints that have been upheld at a much faster rate than usual to clear the backlog, the FCA must of seen this and granted the extention. What we need is an update on their lending policy

Paton spent 12 years at Brighthouse and was its CEO when the FCA ordered it to pay £14.8m compensation to 249,000 customers who were lent more than they could afford to repay

I would certainly think so because the result were due out a few days ago but delayed until end of July. Otherwise I would be expecting the company to be buying shares at this price.