Amigo shares slide after watchdog extends probe into troubled lender

Shares in troubled lender Amigo have tumbled further after it said the financial watchdog has extended the scope of an investigation into the firm.

The guarantor lender told investors on Tuesday that the Financial Conduct Authority (FCA) will continue its lengthy investigation.

The FCA launched the investigation last May into how Amigo assesses the creditworthiness of customers and its governance of the process.

The company provides money to borrowers who have a friend or family member willing to guarantee the loan.

However, it has faced accusations that it failed to properly assess whether customers could afford loans.

The investigation had covered the period from November 1 2018 to May 20 last year, but will now be extended to cover complaints from May to the current date.

“The FCA investigation will consider whether those complaints have been handled appropriately and whether customers have been treated fairly,” Amigo said in a statement.

In its update to the stock market, Amigo said it “will continue to co-operate fully with the FCA”.

Last year, Amigo revealed that compensation provisions soared to £159.1 million in its half-year after it received 25,000 complaints, with a jump in those from claims management companies representing customers.

The company also warned there was “material uncertainty” over its ability to continue as a going concern following a year which also its founder James Benamor attempt to overhaul its leadership team.

Shares in Amigo were down 13.8% at 11.8p in early trading on Tuesday.