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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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My friend is 74 and ailing. In April 2013 he acted as a guarantor

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My friend is 74 and ailing. In April 2013 he acted as a guarantor for a 12 month loan of £5000 with Amigo for a woman who he had helped because of her difficult circumstances. He did not fully understand what he was getting himself into. Over the course of the 12 months he paid out something like £5000 because of the default in payments. The woman renewed the loan in April 2014 but this time over a 60 month period at 49% interest. My friend received a telephone call from Amigo which took him through a number of questions which was followed by written confirmation of the new guarantee. He continues to have to pay the interest and has now paid out nearly £7000 and has no further savings. The woman is destitute. During the time the original loan was taken out my friend was seriously ill and has been on medication which can cause drowsiness. Also he is an alcoholic. He has written to Amigo with my help to ask to be released from the guarantee claiming he did not understand what he was getting himself into and that unless he had a satisfactory reply he would take the matter to the Financial Ombudsman. Amigo responded on 31 October 2014 to the effect they were looking into the matter.
If he has to pay the capital and interest on the revised loan he will need to pay at least £11000. The whole matter is making him even more poorly and he is fearful that he might lose his home.
Can you advise if there is anything he can do to get released from the guarantee or at least minimise his exposure so that the matter can be put behind him.
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Has your friend made a complaint to the Financial Ombudsman?
When they extended the guarantee were they at any point aware of his age and health?
Did they at any point ask him to obtain Independent Legal Advice?
Kind regards
Customer: replied 3 years ago.

No he has not complained formally to the Financial Ombudsman because he is informed that he has to wait 8 weeks from Amigo's acknowledgement of receipt of letter before he can apply.

I am not sure whether Amigo were aware of his age but I suspect so. I have the tape of the conversation and it was very professional no doubt ticking all the boxes. I do not believe they were aware of his health until he wrote asking for the release when he explained he was unwell and had been in hospital.

The renewal phone call was made using the woman's phone with her prompting his replies in the background.

In the documentation it advises him to take legal advice. He lost the documentation. I had to write to Amigo for it on his behalf which is why I now have it.


Thank you.
First thing you must do is make a complaint to the FoS - you have to get the wheels in motion because this will be the most cost effective way of dealing with this.
Secondly - to caveat my response I must make clear that I agree with the CAB - he will be bound by what he has signed and while there may be some legal recourse available to him (as explained below) I cannot guarantee he will be able to escape this. My suggestion therefore is to write to Amigo on the following terms:
1. Say you have been given authority to correspond on behalf of the guarantor as he is too unwell to communicate;
2. Say you are appalled that a vulnerable person has again been taken advantage of by a pay day lender - purporting to be a responsible lender;
3. Say that you have reason to believe that the guarantor was "unduly influenced" (as per RBS v Etridge No.2) by the borrower into signing the guarantee. Accordingly you have reason to believe that Amigo was well aware of this and deliberately turned a blind eye.
4. Say to them that the conduct of Amigo as a responsible lender has to be called in question when it was clear that the guarantor was vulnerable, had not taken independent legal advice (and Amigo clearly did not chase this up ) and was potentially being influenced by the borrower. Say also that Amigo should have been aware that the borrower was destitute should not have continued to lend at high interest rates;
5. Say you want an immediate investigation into the circumstances around which the loan was made and the guarantee procured - and would call on Amigo to provide a recording of the phone call when the guarantee was signed at which point you believe it should have been obvious to Amigo that the guarantor was being unduly influenced;
6. Say that you have made a complaint to the FoS and would insist that Amigo stop any further enforcement action and suspend any accrual of interest - while the complaint with the FoS is going on;
7. Say that if they do not agree to these demand you reserve the right to:
(i) Report the matter to the press; and
(ii) Make a complaint to the Financial Conduct Authority.
In my opinion the only way to get them to reconsider this is to put pressure on them that you are going to call their conduct in to question. As a consumer financial services company they have to be fair and open and if they are not it could give grounds to challenge the guarantee.
I look forward to hearing from you.
Kind regards
Alex J. and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Thanks. This is very helpful. My friend has been supplied with a CD of the conversation relating to him agreeing to be a guarantor for the renewed loan.

What will happen if I send the letter and also say he cannot afford to make any further payements as he has run out of savings and ask them not to take anything further until the matter is resolved and then cancels the authority with his bank?

His financial situation is even worse. Th same woman who had no car persuaded my friend to go with her to a care hire car firm where she signed a four week hire agreement and myu firend gave his credit card details for payement in case she could not pay again acting like a guarantor altjogh he signed nothing. Several months later he discovered that he had paid out £1560 for the care hire which was still continuing including the parking fines. I contacted the car hire firm and explained they had no authority to continue taking his money and they stopped doing so. He asked for a refund and although the person we spoke to was very sympathetic the following week he was fired. So we wrote to the company who have washed their hands of the matter. My friend's bank have reported it to their Fraud Department who have written to the company but are doubtful if they can help because he voluntarily gave his credit card details.

Is there any way he can get his money back?