Guarantor Complaint

📝 How to Complain if You're a Guarantor for a Loan

If you agreed to be a guarantor for a loan, you may be able to complain and ask to be removed as guarantor—especially if:

• You couldn’t afford to make the repayments without serious difficulty

• You were pressured or felt you couldn’t say no

• You didn’t properly understand what being a guarantor meant
  
  

✅ What Lenders Should Have Done

Before approving the loan (or any top-up), the lender should have checked that it was affordable for both the borrower and the guarantor.

According to the regulator, a loan is only affordable if you can repay it on time without:

• Falling behind on other bills

• Needing to borrow more money

• Being forced to sell your home

If the lender didn’t do proper checks, you may have a strong reason to complain.

⚖️ What the Ombudsman Says

In summer 2019, the Financial Ombudsman made an important ruling in favour of a guarantor who said they should never have been accepted in the first place. That decision has helped many others win similar complaints.

✉️ When You Can Complain

You can complain:

• Even if the borrower is still paying the loan

• If the borrower has stopped paying and you’re being chased for the money

• If you’ve been taken to court for a County Court Judgment (CCJ) or faced a charging order

This process only applies if you are the guarantor.
If you are the borrower, you’ll need a different complaints process. See: How to complain if are a BORROWER of a GUARANTOR loan

📌 What to Do Next

This page includes a template letter you can use to complain directly to the lender. You don’t need a solicitor, and you don’t need to write a long legal document—just explain your situation clearly and honestly.

Reasons to Complain as a Guarantor

If you were made a guarantor for a loan and things have gone wrong, there are many valid reasons to complain. You don’t need to list every single one—just the ones that apply to your situation. Often, the easiest complaint to prove is that the loan was unaffordable for you, but other issues might be more important to you personally.

The most important thing is to tell your story honestly. If something didn’t feel right, say so.

🟠 1. The Loan Was Unaffordable for You

Guarantor lenders were required to check that you could afford to repay the loan if the borrower stopped paying. That means:

• They should have asked about your income and expenses, including things like rent or mortgage, bills, food, transport, debts, childcare, etc.

• Because these loans are often large and long-term, they should have checked your credit report and asked for evidence of your income.

• If you would have had to borrow more money, fall behind on bills, or cut back on essentials to afford the payments, the loan wasn’t affordable.

Amigo (a main lender) themselves said a guarantor must be able to afford the loan and still live their normal life. The Financial Ombudsman often refers to this when deciding if a guarantor loan was fair. That means the lender should have looked at what you were actually spending—not what you could cut back on, like quitting smoking or stopping pocket money for your kids." 

Also, owning a home doesn’t automatically mean you can afford loan repayments. The rules say you should be able to repay the loan from your income or savings, not by selling or remortgaging your home.

If your credit record showed financial problems, or if you already had debts, that’s more evidence the loan wasn’t affordable for you.

🟠 2. You Had Financial Links to the Borrower

If you shared money with the borrower (e.g. rent, bills, child maintenance), the lender should have considered this.

For example:

• If you and the borrower later split up

• If they lost their job

• Or if they stopped helping you financially
  
  

…then your own finances would have suffered, making it much harder for you to step in and pay their loan.

The lender should not have assumed that financial help from the borrower would always continue.

🟠 3. A Top-Up Loan Was Not Properly Explained

If the borrower topped up their loan and you were asked to stay on as the guarantor, the lender should have:

• Checked that you still agreed to be the guarantor

• Made sure the new loan was affordable for you

• Clearly explained what the new total loan amount was
  
  

Sometimes, people were told they were just guaranteeing the extra money being added. For example, if £1,500 was transferred, you might have thought that was the full loan. But actually, you may have been on the hook for something like £6,400, because the top-up included repaying the old loan too.

If this wasn’t made clear, that’s a reason to complain.

🟠 4. You Were Pressured Into Becoming a Guarantor

This isn’t just about feeling awkward saying no. It’s about being put under real pressure or being manipulated.

Some examples:

• You were asked by your boss and felt your job could be affected

• You lived in supported or sheltered housing and were asked by someone in authority

• You were reliant on the person who asked you – maybe a caregiver or a partner helping with bills

• You were in an abusive relationship – not just physical abuse, but emotional or financial abuse too
  
  

If the borrower told you what to say on forms or during the call with the lender, that’s also relevant. Say so.

Don’t worry if you can’t “prove” this with documents. Just explain honestly what happened and how you felt.

🟠 5. You Didn’t Understand What Being a Guarantor Meant

Being a guarantor isn’t a common thing, and it’s very different from taking out your own loan. The lender should have made sure you fully understood what you were signing up for.

Some valid reasons to complain include:

• English is not your first language, and things weren’t explained properly

• You struggle with complex financial decisions

• You thought you were just giving a character reference

• You thought the borrower was fully responsible after they started repaying

• You believed you’d only have to pay if the borrower died or went bankrupt

• You relied on the lender’s website saying they’d always try to help the borrower first

• The paperwork was too difficult to understand

If any of that sounds like your situation, it’s worth including in your complaint.

✅ What Would a Fair Outcome Be?

If you were never in a position to be a guarantor—because the loan was unaffordable or you were pressured or misled—then the fair outcome is:

• You should be removed as guarantor, and

• Any payments you’ve made should be refunded

• Any negative marks on your credit report should be deleted
  
  

Once you’re no longer the guarantor, the loan becomes a normal loan between the lender and the borrower. That can help the borrower too, since they can deal with the loan through a debt solution (like a debt management plan or bankruptcy) without it affecting you.

📧 How to Complain

• Complain directly to the lender – email is best

• Use a subject like: "Complaint by Guarantor"

• Include all the points that apply to your situation

• Don’t worry if you can’t include everything – your story matters most

• You can use a template (like one we've created), but make sure to personalise it

Lenders often say No to good cases – go to the Ombudsman

Lenders frequently reject a complaint even if you have a strong case. So don’t be disheartened if this happens.

If they send you a long reply which makes it sound as though your complaint has no chance, ignore it! They are hoping you will give up.

When the lender says No (or if you haven’t had a reply within 8 weeks) you can send your case to the Financial Ombudsman (FOS).

FOS is very friendly. You just have to say what happened and why you feel it is unfair. You don’t need a solicitor to help you do this. You don’t have to argue a legal case or say what rules your lender has broken.

Summer 2020 – people are winning more guarantor loan complaints

It used to be rare to win a complaint against a guarantor lender, by the borrower or the guarantor. But from May 2019 there have been a string of good results from FOS against Amigo and other guarantor lenders such as UK Credit.

Many of these have been borrower complaints but here are two guarantor examples:

• an Ombudsman’s decision in a case where the guarantor, Miss W, had used the template letter on this page. The ombudsman decided that the loan was unaffordable for her AND had not been properly explained to her. She was removed as guarantor for the loan.

• One person says that Amigo has removed him as a guarantor when he complained.

MICRO-BUSINESS GUARANTOR COMPLAINT

Here is a professional and well-structured micro business loan guarantor complaint letter. In the UK and EU, a micro business is usually defined as a business that:

• Has fewer than 10 employees, and

• Has an annual turnover or balance sheet total of €2 million or less (about £1.7 million).

This version is tailored for a small business owner (or someone who guaranteed a loan for a micro business), and it can be customized to fit your situation:

Subject: Complaint Regarding Guarantor Responsibility for Micro Business Loan – [Loan Reference Number]

Dear [Lender’s Name or Complaints Department],

I am writing to formally raise a complaint regarding a loan taken out by [name of micro business or borrower] in [Month, Year], for which I was named as the personal guarantor.

Summary of Complaint

I believe that I should not have been accepted as a guarantor for this loan. The checks carried out prior to approval were inadequate, and the risks associated with this type of loan were not properly explained to me. I am also concerned that the affordability checks were not sufficient to assess whether I could reasonably meet the obligations if the business failed to repay.

As part of this complaint, I also request that you send me a copy of all personal information you hold about me, including but not limited to:

• Any affordability assessments or credit checks performed

• A copy of the signed guarantee agreement and all related documentation

• Any correspondence or call recordings involving me
  
  

Grounds of Complaint

The basis of my complaint is as follows (please note which apply to your case – I’ve included common grounds for you to choose from):

• Inadequate Affordability Checks: I was not asked to provide sufficient proof of my personal income, expenses, or liabilities. At the time the loan was issued, my income was [low/irregular/entirely tied to the business], and I was not in a financial position to cover the repayments if the business defaulted.

• Failure to Consider Business Risk: The lender did not adequately assess the viability of the micro business before approving the loan, nor did it consider that I, as the guarantor, was financially dependent on the same business for income. If the business struggled or failed, I would be unable to repay the debt.

• Insufficient Explanation of Guarantor Obligations: I did not fully understand the extent of my liability. I was not clearly informed that I would become personally responsible for the entire loan amount if the business failed to repay, or that this could affect my personal credit rating and financial stability.

• Pressure or Misinformation (if applicable): I felt pressured into agreeing to act as guarantor [by the borrower / due to urgency from the lender], and I did not feel I had time to seek proper legal advice or fully understand the documentation.

• Inaccurate or Incomplete Credit Assessment: My personal credit record at the time showed that I already had other debts and limited disposable income. A proper assessment would have shown that I could not reasonably afford to guarantee this loan.
  
  

What I Am Requesting

• That I am released from the personal guarantee on this loan

• That any negative impact on my personal credit file related to this guarantee is removed

• [If applicable:] That any personal payments I have made toward this loan be refunded

• That any further enforcement or collection action be suspended while this complaint is under investigation, and during any escalation to the Financial Ombudsman Service (FOS), if needed
  
  

Please confirm receipt of this complaint and provide an estimated timeline for your response, in line with FCA complaint handling rules.

Yours faithfully,
[Your Full Name]
[Business Name, if applicable]
[Your Address]
[Your Email / Phone Number]