Amigo Scheme – Frequently Asked Questions

Who are Allegiant?

We are a long-established Claims Management Company in unaffordable lending. When you signed up with us, we agreed to act for you on a “no win, no fee” basis. Our charges are usually 30% (inclusive of VAT) on any compensation payout from Amigo.

What is the latest update with Amigo?

Most final payouts should be made during April 2025.

As you may know, Amigo is in a ‘Scheme of Arrangement’ whereby it is winding down as a business and has little money to compensate customers for loans it shouldn’t have given. Normally, when a customer is compensated for irresponsible lending, they get back all the interest and charges they paid. But because of Amigo’s situation, eligible customers are only receiving a small proportion of compensation – based on 18.51 pence in every £1.

How do I pay Allegiant their fee?

Paying Allegiant’s fee is easy. You should pay our fee once you have received compensation funds from Amigo. Our invoices can be paid by clicking on a link and paying by card, or over the phone, or via internet banking transfer.

Why is the fee 30% (including VAT)?

Allegiant charges a success fee of 30% on Amigo claims, which is intended to cover our operational costs, IT, compliance and legal organisational structure, and staffing costs. We only charge this fee when there is a successful compensation payout, so that customers can use some of their compensation in order to settle the fee. It also means that when a claim against Amigo has been unsuccessful – and there is no compensation payout – there is no fee for Allegiant’s work and means that Allegiant would have provided its professional services for free. This is also something we account for in our operational costs.

The fee is outcome-based billing, in that it is charged as a percentage of the compensation payouts. Some claims may need more work than others, and the flat fee remains fixed regardless of the amount of time and resource Allegiant has to apply to a particular claim.

The fee being set at 30% is lawful and compliant with the regulations Allegiant adheres to:

• The regulator previously introduced a fee cap of 20%, but this only applied to claims about payment protection insurance (PPI). Amigo has nothing to do with PPI, and the claim against them was about irresponsibly providing unaffordable loans.
• The regulator introduced a separate fee cap for non-PPI claims. This cap was effective from 1 March 2022 and had a series of ‘bands’ which capped what a claims management company could charge for its services. Most customers making a claim against Amigo with Allegiant’s assistance, signed a claims pack with Allegiant before 1 March 2022, so the newer fee cap does not apply.

Why have I got another invoice?

Allegiant only requests fee payment upon a customer receiving their compensation payout from Amigo. As Amigo is paying in two stages (first stage being 12.5p, and second stage being 6.01p), then Allegiant issues two invoices accordingly.

For example:

First payout of 12.5p in £1:

You receive £125 from Amigo. Allegiant’s 30% fee would be £37.50

Final payout of 6.01p in £1:

You receive £60.10 from Amigo. Allegiant’s 30% fee would be £18.03

This being split into two stages makes no difference to the amount that Allegiant charges you, and results in exactly the same fee as if it was charged in one go:

Total payout of 18.51p in £1:

You receive £185.10 (£125 + £60.10) from Amigo. Allegiant’s 30% fee would be £55.53 (£37.50 + £18.03)

Can I take my claim to an Ombudsman?

Regarding your claim about irresponsible lending of Amigo loans, this unfortunately cannot be taken to the Ombudsman service, as they will be unable to look into the claim since the Court-approved Scheme of Arrangement has been in place.

In terms of Allegiant’s conduct, it is the ombudsman service’s job to look into each case individually. However, the ombudsman service has consistently endorsed Allegiant’s conduct in terms of our treatment of customers.

Example of what an Ombudsman said:

• “When Mrs B instructed Allegiant to pursue her claims against B in October 2020, she agreed to the terms and conditions set out in the Terms of Engagement. The terms and conditions which set out the cost of Allegiant’s service explained ‘The success fee is 30% inclusive of VAT calculated of cash in hand compensation’. ‘Cash in hand’ is defined as ‘the actual cash in hand compensation that you receive from the respondent after debt and tax deductions have been applied by the respondent.’”
• “The agreement Mrs B had with Allegiant was on a “No win No fee” basis. This means Allegiant charged a percentage success fee, not a fee based upon the amount of work they did. This meant any work done on any unsuccessful claim would be done for free. Where a claim was successful, Allegiant’s fee maybe more or less than the value of the work they actually did. This is the risk taken by all parties in this type of agreement. So, I think it’s reasonable for Allegiant to charge Mrs B their success fee.” (https://www.financial-ombudsman.org.uk/decision/DRN-5037474.pdf)

In a different case, an Ombudsman explained:

• “Miss C complains about Allegiant Finance Services Limited (“AFSL”) and the success fee they are charging following her unaffordable lending claim.”
• “The scheme of arrangement was put in place by the industry regulator to aide consumers such as Miss C in receiving compensation, taking into consideration lender A’s trading status. This isn’t something AFSL were able to control, or influence. Nor were AFSL able to control FOS’ decision to pause, and then stop, investigating complaints brought to them, due to the creation of this scheme. From the evidence available to me, I’m satisfied AFSL’s original submission to lender A ensured Miss C’s claim was included in the scheme of arrangement. I’ve seen evidence that shows lender A continued to engage with AFSL, making AFSL aware of the payment made to Miss C, including the amount. So, I’m satisfied lender A continued to note AFSL as her representative. And I think this is further supported from the updates I’ve seen AFSL provided to Miss C, confirming her claim had been registered with the scheme and what she should expect to happen next. So, I think AFSL made it reasonably clear to Miss C they were continuing to act on her behalf, after the scheme was put in place.” (https://www.financial-ombudsman.org.uk/decision/DRN-4926131.pdf)

Finally, an Ombudsman has commented on Allegiant treating customers in the right way under Consumer Duty:

• “While I empathise with Mr K, I’m not persuaded that Allegiant has treated him unfairly or failed to do what is required of it under Consumer Duty.” (https://www.financial-ombudsman.org.uk/decision/DRN-5200401.pdf)