February 22, 2024
Loans

Amigo sold me loans while I was £40,000 in debt


  • Have you been affected by Amigo loans? Email elizabeth.haigh@mailonline.co.uk 



A business owner who was sold more than £20,000 in unaffordable loans by disgraced payday lender Amigo while he was already £40,000 in debt has told how the firm ‘destroyed my life’. 

John Mackenzie, 49, from County Antrim, Norther Ireland, took out loans worth £24,000 from Amigo starting in 2016.

He told MailOnline he has been fighting with Amigo and the Financial Conduct Authority for years over the affordability of his debts. 

‘All I want is my money back so I can settle my debts and sort out my life,’ businessman Mr Mackenzie said.

‘If my claim had been dealt with at the time I first submitted it, my money would have been paid back with interest. Now Amigo is in administration, they’re sitting on that money and I can’t afford to live.’ 

Mr Mackenzie is among tens of thousands of customers of guarantor lending firm Amigo Loans who has still not received a penny of their money back – up to 18 years after first being missold unaffordable loans.

John Mackenzie, 49, from County Antrim, Norther Ireland, took out loans worth £24,000 from Amigo starting in 2016
Amigo founder and former CEO James Benamor has become a billionaire thanks to the initial success of his business

Amigo was permanently banned from lending in May 2022 by the Financial Conduct Authority and was ordered to repay interest taken from customers sold ‘unaffordable’ loans from as early as 2005.

Amigo lent at high interest rates to people with a poor credit score if they had a friend or family member willing to make repayments if they could not. 

But after the company was inundated with complaints for selling unaffordable loans, it collapsed – depriving tens of thousands of customers of fair compensation.

Meanwhile Amigo’s CEO James Benamor – who once described his younger self as a drug-taking petty criminal – became exceedingly wealthy, cashing in £305million of shares after his company was first floated on the stock market. He resigned from the company’s board in 2020.

Previously pictured with some of the world’s most famous businessmen such as Richard Branson, Benamor even appeared on Channel 4’s The Secret Millionaire, before by 2018 his wealth had increased to the point that he was officially classed as a billionaire.

His wealth fuels an ultra-glamorous existence that has, in recent years, been chronicled via Facebook, Instagram and Twitter accounts showcasing endless exotic holidays and extravagant family outings. 

Away from the founder’s jet-set lifestyle, Amigo previously calculated that customer complaints could cost it around £338million – but now it has gone into administration, customers are in line to receive as little as 17 percent of the cash they are entitled to. 

The company faced a slow downward spiral after being forced to stop lending in 2020, then again in 2022 after a brief return to the market.

Amigo was permanently banned from offering new loans in May 2022 by the Financial Conduct Authority after it was found to have missold deals to tens of thousands of customers
James Benamor has previously been pictured with some of the world’s most successful businessmen, including Richard Branson (right)
Benamor’s customers still have no idea when they will receive any compensation

Financial authorities had realised it had been handing out loans to almost anyone, with only the barest consideration given to whether borrowers or their guarantors could afford them.

READ MORE: How ‘Secret Millionaire’ Amigo loan shark funded his jet-set luxury lifestyle after leaving thousands of borrowers broke by making them use friends and family as guarantors for loans with 49.9% interest rates 

This included Mr Mackenzie, who was in debt to the tune of £40,000 after his business hell on hard times when he was granted not just one, but four loans by the company, after his sister-in-law agreed to be his guarantor.

He said: ‘They didn’t care what I earned. I was self-employed, they knew my debt, and they still made the decision to lend.

‘Their whole policy was they didn’t care about who they were lending to, they only cared about the guarantor. Guarantor loans should be banned, and Amigo needs to be held accountable.’

Inevitably Mr Mackenzie struggled to keep on top of his loan repayments, and described how money simply ‘disappearing’ out of his bank account had a major impact on his physical and mental health.

‘My health has deteriorated dramatically, even to this day when I get money in my bank I transfer it to my savings account because I am scared it will disappear.

‘The word Amigo is a trigger for me, I go into a heightened state of fear. 

‘Amigo Loans ruined my life and that’s not being dramatic. I’ve experienced suicidal events. I was struggling. Why was this allowed to happen?

‘I don’t trust anybody with money now, I don’t borrow anything anymore. I don’t trust authorities.

‘I take full responsibility for anything I borrowed, but if things aren’t right there need to be adaptations and changes.’

Benamor (right) appears on Channel 4’s Secret Millionaire in 2008

In 2022, a court ordered Amigo to pay back interest of £112 million to customers who were missold loans. 

Amigo has since ruled that all four of Mr Mackenzie’s loans were unaffordable. But he believes that people with underlying health conditions and other disabilities should have been prioritised for payouts sooner.

He still has no idea when he will receive any money after Amigo admitted to missing its target of reaching decisions in all outstanding cases by January. 

In the two years after Amigo floated on the stock market, the ombudsman received thousands of complaints from people believing they had been tricked into taking loans they couldn’t afford.

A spokesperson for Amigo told MailOnline: ‘To date, Amigo has issued over 173,000 decisions to customers with claims, which represents approximately 82% of total claims made. 

‘We anticipated that all decisions would be communicated by the end of January 2024, however, the complexity in assessing and calculating certain claims, especially for some claimants with outstanding loan balances, has taken longer than initially anticipated. 

‘We apologise for the delays in the process, and our intention is to issue all responses by mid-March 2024.

‘Cash payments cannot be made until we have determined substantially all claims and their value. We will make payments to customers with valid claims as soon as possible. We encourage claimants to visit our website for latest information, and to ensure that we have their up to date contact details.

‘Amigo was founded with the aim of providing credit to people who were otherwise excluded by high-street lenders. Our priority now is to complete the orderly wind-down of the company and provide the maximum level of redress to eligible claimants.’



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