Embedded Files
How the borrower of a guarantor loan can complain
How the borrower of a guarantor loan can complain
Amigo and other guarantor loans are very expensive and the lender often doesn’t check properly that you will be able to manage the loan repayments without having to borrow more.
If proper checks would have shown that you couldn’t afford the repayments, complain! There is a template letter in this article for you to use.
You can get a refund of the interest you have paid, or an existing loan reduced so you only repay the amount you borrowed.
Amigo, the largest lender, is now agreeing with many complaints. But if your complaint is rejected send the case to the Financial Ombudsman (FOS).
FOS statistics published in August 2019 show that they are upholding a massive 83% of guarantor loan complaints.
If you are not the borrower but the guarantor, read Complaining if you are a guarantor which has a different template letter to use, as the points a guarantor can make are different.
Summary – guarantor loan affordability complaints
Summary – guarantor loan affordability complaints
Guarantor lenders should check a loan is affordable before giving you the money. The regulator’s definition of affordable is that you have to be able to repay it on time without it leaving you so short of money that you have to borrow more or get behind with bills.
So if you had to borrow more or get behind with bills because of your guarantor loan, you can make an affordability complaint. You can make do this:
if you are still paying the loan,
if you have stopped and your guarantor is having to pay,
if the loan has been repaid.
If you win your affordability complaint, the interest is removed from a loan you still owe, so you only repay what you borrowed. If the loan has already been repaid, you get a refund of the interest you paid plus 8% statutory interest added.
What should the lender have checked?
What should the lender have checked?
Before agreeing to lend, the lender should have made sure you would be able to make the repayments for the whole length of the loan.
You should have been asked about your income and your expenses, including rent/mortgage, council tax, utilities, food, transport, clothes, your other debts and everything else you spend money on.
Guarantor loans are large financial commitments. So I would expect a lender to have asked for evidence of your income, to have checked your credit record, and to have verified your expenses.
Just making the payments doesn’t prove the loan was affordable!
You may have been repaying with difficulty, taking out other loans, because you didn’t want your guarantor to be affected.
What did your lender get wrong?
They may only have run a quick check on you because there was a guarantor. It doesn’t matter how well off your guarantor is, the loan had to be affordable for you!
You may have given answers to questions about your expenditure that were too low, because you were guessing or because you were desperate. If the figures looked too low the lender should have checked further.
You may not have mentioned some debts. If this didn’t match with your credit record, the lender should have double-checked this.
Was your income regular? If you were self-employed or had overtime that varied, the lender should have looked at this.
Were there recent applications for credit or recent problems on your credit record? Guarantor loans are aimed at people with bad credit scores, but the lender should have been careful if your position looked as though it was getting worse.
When you top up an existing loan, the lender should run another set of checks to make sure this was affordable. Did you miss any previous loan repayments? Had your finances got worse since your first loan? The lender should have realised their current loan may be unaffordable for you and not given you more money.
If you feel there was something unfair about your case and it isn’t listed here, add that into your complaint as well!
What would a “fair solution” be?
What would a “fair solution” be?
If the lender or the Ombudsman decides the loan wasn’t affordable, thiis is what happens:
The loan has been repaid, then any interest paid should be refunded to you (or to the guarantor if they had to make some of the payments).
The loan is still outstanding, then interest should be removed from the balance that is owing, so you only repay what you borrowed. The lender should accept an affordable monthly payment from you to pay this off, not go after the guarantor.
Will complaining affect your guarantor?
Will complaining affect your guarantor?
The complaint itself won’t affect your guarantor if you carry on making the payments. The guarantor should not be told you have complained.
But if you stop paying the loan when you make a complaint, the lender may decide to get your guarantor to pay it. If you don’t want this to happen, you have to somehow carry on making the payments even though it’s hard.
If you can’t afford to carry on paying and you don’t want to hurt your guarantor, this is a very difficult situation. Making an affordability complaint won’t make your position worse, but it isn’t an immediate escape from your problem.
Think about whether your guarantor also had a good reason to complain – see Complaining if you are a guarantor for details. If they win a complaint, they will be removed as a guarantor, which would take a lot of pressure off you.
If you have other high-cost debt such as payday loans, then getting refund for those could provide you with some money to help pay the guarantor loan.
How to complain
How to complain
A template complaint to use
It’s best to complain to the lender by email – there is a list at the end of this page.
I suggest SUBJECT ACCESS REQUEST AND COMPLAINT BY BORROWER as the email title. Here is a template you may find helpful.
Change this so it describes what happened to you. No one will include everything in this template, just delete what doesn’t apply to you and add in any other bits.
TEMPLATE GUARANTOR LOAN COMPLAINT
TEMPLATE GUARANTOR LOAN COMPLAINT
You gave me a loan of [£2,000] in [August 2016].
Only put this in if it applies to you: I took a top up of [£700] in [September 2017]
Add a reference number for the loan or give some other details such as your date of birth and your address when you took the loan out.
Please send me a copy of all the personal information that you have about me, including but not limited to all credit record checks, a copy of my loan application(s) and recordings of all phone calls from me. You have 30 days to reply to this Subject Access Request.
I am making an affordability complaint. This loan was/These loans were unaffordable for me and you would have realised this if you had checked properly before giving me the loan(s).
Delete or change any of the following so they are right for you:
[You did not ask me for proof of my income or expenses.]
[You would have seen from my credit record that I had recently missed payments/defaults/was in a debt management plan/was in an IVA showing that I was in financial difficulty.]
[You did not ask about my expenses in detail.]
[I was on a low income/My only income was my pension./My only income was from benefits.]
[I have health problems and get ESA/PIP/DLA but you did not ask me if I had any extra expenses because of this.]
[When I topped up the loan, you did not ask me if my circumstances had changed/you ignored the fact that I had made several payments late to you, showing that I was in difficulty/ you should have seen from my credit record that my financial situation had got worse.]
I am asking you to remove the interest from the balance so I only have to repay what I borrowed and to allow me to reduce my monthly payments to an affordable amount.
If the loan has been repaid change that to [refund me the interest that I have paid plus 8% statutory interest.]
If you don’t want your guarantor to be informed: [I want to carry on making the normal monthly payments because I do not want my guarantor to be affected in any way by my complaint.]
I understand that you have 8 weeks to respond to my affordability complaint before I send it to the Financial Ombudsman.
Also send bank statements!
It’s good if you can attach bank statements to your complaint. This helps by showing how unaffordable the loans were. Some lenders such as Amigo often ask for bank statements, so it speeds things up if you send them at the start.
It doesn’t matter if there is gambling showing on the statements – that actually supports your case that they should have made better checks at the start!
Don’t delay starting a complaint if you are trying to get your bank statements. You can always add them later. But now is a good time to get the statements as they help a lot if your case has to go to the Ombudsman.
When you get the personal information (SAR) back
Copies of personal information (SARs) are often sent out by post, so if you have moved, make sure the lender has your new address. You should get the information within 30 days. It is often sent on a CD with a password.
This information is not the lender’s response to your complaint. Most lenders will send that separate from the SAR, usually a few weeks later.
You don’t need to do anything with the SAR, just keep it safe. You have asked for it now so that you have the details in case the lender rejects your complaint or makes a poor offer so your complaint has to go to the Ombudsman.
If the lender rejects your complaint, go to the Ombudsman
If the lender rejects your complaint, go to the Ombudsman
Don’t be surprised if Amigo or another lender says some variation on No, the loan was affordable or The regulator doesn’t say we have to check your bank statements or We based our decision to lend on your application which was inaccurate.
Lenders seem to reject many complaints and hope you give up.
If the lender says No, or you haven’t had a reply 8 weeks after sending your complaint, send your case to the Financial Ombudsman (FOS).
This is free to do. You don’t need a solicitor to help you do this. You don’t have to quote laws or regulations. Just use plain English to say what happened to you and why you feel it is unfair. If you aren’t sure what to do, ask in the comments below this article.
You can just send FOS the complaint you sent the lender. If you disagree with anything the lender said in their reply, mention that as well.
Also read How Subject Access Request information can help an affordability complaint which looks at how that SAR information can help. But you don’t have to do this – you can keep your FOS complaint short if you want.
Don’t delay in sending a case to FOS. This has to go within 6 months. And while you have an “open” complaint, with the lender or at FOS, the lender cannot start court action.
Are you likely to win your Ombudsman complaint?
Are you likely to win your Ombudsman complaint?
From May 2019, a lot of guarantor loan complaints are being upheld at FOS. It’s not like payday loans, these guarantor loans are large and you can win your case if you only had one loan.
There has been one decision “from an ombudsman” against Amigo that has been published. That explains how poor Amigo’s affordability checking was.
I’m not going to say everyone who complains will win their case, but this is very good news!
It is much simpler to win a case at FOS than a court case. If Amigo or any other lender has already started a court case against you, you can ask for the case to be stayed pending the result of the Ombudsman.
Email addresses
Email addresses
It’s best to complain to a lender by email, not phone, so you have a record of when you sent the email and what you said.
Amigo – complaints@amigoloans.co.uk
Bamboo – complaints@bambooloans.com
Buddy Loans – customerservices@buddyloans.com
Consollo – same email as TFS (put CONSOLLO COMPLAINT as the title)
George Banco – complaints@georgebanco.com
Glo – help@glo.co.uk
Guarantormyloan – customerservice@guarantormyloan.co.uk
Hero Loans (Hamilton Greig) – collections@heroloans.co.uk (put COMPLAINT as the title)
Juo Loans – customerservices@shelbyfinance.com
LendFair – complaints@lendfair.co.uk
Suco – hello@suco.co.uk (ignore any suggestions to contact ODR – you want a reply to your complaint from Suco and you will send the complaint to the Financial Ombudsman if it is rejected.)
TrustTwo complaints@everyday-loans.co.uk (put TRUSTTWO COMPLAINT as the title)
UKCredit welcome@ukcredit.co.uk
1 plus 1 complaints@1plus1loans.co.uk
Page updated
Google Sites
Report abuse