Amigo sets aside cash to settle complaints

Amigo Loans will have until the end of October to clear a backlog of around 9,000 complaints that it had originally promised to get out of the way a week ago.

The lender said that it had agreed a new deadline with the City watchdog to allow it time to deal with customers.

The company said that it now has until October 30 to ensure that all complaints are dealt with within eight weeks.

The Financial Conduct Authority (FCA) had originally given Amigo until June 26 to work through its backlog, the company revealed in May.

However, the process has taken a lot more time than first thought. It is also expected to be much more expensive, Amigo said.

On June 8, the price was set at a minimum of £35m, but the new extension is likely to add many millions to the bill.

“Whilst there is significant uncertainty about the eventual outcome, the cost of the amended (deal with the FCA) is expected to be substantially higher than the estimate of at least £35m, as it will cover a longer period and will be dependent on the total number of complaints received,” it said in a statement.

Amigo said it has enough cash and financial headroom to keep on paying for its operations. Its cash balance was more than £136m at June 30.

The firm had already warned investors and customers last week that it will need more time to reset the backlog of complaints that would have been waiting for eight weeks or more on last Friday - the original deadline.

At the time it said the rate of complaints had risen substantially since it signed the original agreement with the FCA.

It added: “Amigo will continue to assess each complaint on a case by case basis to ensure fair outcomes for our customers.”