With a guarantor loan, someone (usually a friend or family member) agrees to pay if the borrower can’t. Lenders like Amigo, Buddy Loans, George Banco and TrustTwo offered them. The lender should still have checked the borrower could afford the loan, and that the guarantor could afford to step in.
If you were the guarantor and had to make payments, or the lender didn’t check you could afford to, you may have a complaint of your own.
Signs the lending was unaffordable
- The borrower already had other high-cost debts
- The lender relied on the guarantor instead of checking the borrower could pay
- The guarantor was asked to pay soon after the loan started
- The guarantor’s own finances weren’t checked properly
What could you get back?
If a complaint is upheld, the usual outcome is a refund of the interest and charges you paid on the lending that shouldn’t have been given, plus 8% simple interest a year on top, and any negative marks about that lending removed from your credit file. If you still owe money, the refund may be taken off the balance first.
How a claim works
- Complain to the lender. You, or a firm acting for you, write to the lender explaining why the lending was unaffordable.
- The lender has 8 weeks to send a final response.
- If you’re not happy with their final response, you usually have 6 months to take it to the Financial Ombudsman Service. If 8 weeks pass with no final response, you can go to the Ombudsman straight away. It’s free.
You can do all of this yourself: our free complaint letters show you how. Or, if you’d rather not, we can introduce you to a regulated firm that will handle it for you, for a fee.
Is there a time limit?
Usually you need to complain within six years of the lending, or within three years of when you realised (or should have realised) you had reason to complain, whichever is later. Lenders sometimes look at older complaints anyway, and the Ombudsman can decide whether a complaint is in time. If you’re not sure, it’s worth checking.
Lenders
Useful guides: affordability checks · how much compensation · refund calculator
Questions people ask
Can a guarantor claim?
Yes. Guarantors can complain about the checks done on them, and about being chased for payments on a loan that should never have been made.
What about Amigo?
Amigo’s customers’ complaints were dealt with through a court-approved scheme of arrangement, and the deadline to claim under it has passed. See our Amigo page.