UK lender Amigo Loans has said the cost of dealing with its backlog of customer complaints will be “significantly higher” than the £ 35million (€ 39million) originally forecast.
Part of the reason is that the controversial lender has agreed, together with the UK’s Financial Conduct Authority, to a four-month extension of its deadline to deal with outstanding complaints until the end of October. The company said the additional delay would likely result in an increase in the number of complaints received and a “significantly higher” cost of resolution than expected.
Amigo said her liquidity remains strong but that she plans to report a significant increase in her year-end provision due to the increase in the number of complaints received.
Amigo’s order book concerns its British customers. The company entered the Irish market last year. Earlier this month, the central bank said it would tighten regulations on these approved lenders, who offer quick loans but often at exorbitant interest rates.
Lenders here will be required to notify clients if a loan may not be in their best interest and will have to inform clients of alternative options.
The Central Bank has also said that using these companies for financial aid should only be a last resort.