Reclaim a Mis-Sold Guarantor Loan (Irresponsible Lending Refund)
With a guarantor loan, a friend or family member backs your repayments. The lender still had to check that the loan was affordable for you as the borrower, and assess the guarantor properly too. If the loan didn't fit your budget, or the guarantor was relied on to make payments you were always going to struggle with, the lending may have been irresponsible. A successful complaint typically refunds the interest and charges paid, plus 8% statutory interest, and can refund a guarantor who had to step in. You submit the claim yourself and keep 100%.
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The FCA's CONC rules on creditworthiness and affordability (CONC 5) require the lender to assess the borrower's ability to repay sustainably and to treat the guarantor fairly. Both the borrower and a guarantor who made payments can complain. Complain to the lender first; you can then refer the complaint free to the Financial Ombudsman Service once you have a final response, or once 8 weeks have passed without one. FOS can order refunds of interest and charges plus 8% simple statutory interest. Note that Amigo Loans entered a court-sanctioned Scheme of Arrangement and then went into liquidation; its scheme has now concluded (with a final distribution made in 2025, paying claimants roughly 18p in the pound), so a normal FOS route is no longer available against Amigo.
Step by step
- 1Gather details of the loan: amount, term, interest paid, and who actually made the repayments (you or the guarantor). Request a statement of account or submit a Subject Access Request if you don't have full records.
- 2Complain in writing to the lender stating the loan was unaffordable and irresponsibly granted, that they failed to make a reasonable and proportionate affordability assessment under CONC 5 for the borrower (and to treat the guarantor fairly), and that you want a refund of interest and charges plus 8% statutory interest and credit-file correction.
- 3Allow up to 8 weeks for a final response and keep dated copies of all correspondence.
- 4If rejected or underpaid, refer it free to the Financial Ombudsman Service, normally within 6 months of the final response. If the lender (such as Amigo) is in a scheme, liquidation or wind-down, check whether a claims route remains open.
What they'll say, and your comeback
“The guarantor covered repayments, so there was no real problem.”
Comeback, Reliance on the guarantor to make payments is itself a red flag that the loan was unaffordable for the borrower. CONC requires the borrower to be able to repay sustainably, not the guarantor to bail them out.
“You declared you could afford the repayments on the application.”
Comeback, A self-declared figure doesn't discharge the lender's duty to carry out a reasonable and proportionate assessment. If proportionate verification would have shown the repayments weren't sustainable, the lending was still irresponsible.
“As the guarantor you have no right to complain.”
Comeback, A guarantor who has actually made payments can complain in their own right and can be refunded those payments if the lending was irresponsible or the guarantor was treated unfairly under CONC.
FAQ
I was the guarantor and had to pay. Can I claim?
Yes. If you stepped in to make repayments, you can complain in your own right. If the lending is found to have been irresponsible or you weren't treated fairly, you can be refunded the payments you made plus 8% statutory interest.
My loan was with Amigo. Does FOS still apply?
No. Amigo entered a court-sanctioned Scheme of Arrangement and then went into liquidation. Its redress scheme has concluded, with the final distribution made in 2025 at roughly 18p in the pound, so affordability claims against Amigo can no longer be pursued through FOS or the closed scheme.
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A self-serve tool, not a law firm. General information, not legal advice.