Amigo Holdings (LON: AMGO) has warned that profits will be hit following a high number of complaints from claims management companies.
The loan provider has worked with the Financial Conduct Authority (FCA) to address 25,571 complaints and has yet to address further 2,517 complaints.
Amigo Holdings previously expected full-year profits to reach £116.4m, however, is now expecting a £85m hit.
Amigo’s new chief executive Gary Jennison said: “While operationally we have turned a corner with complaints, the sustained volume we are seeing will have an impact on the complaints provision going forward.”
“We have placed the provision under review and a full update will be provided at our half-year results. Working with our regulator to fix the complaints situation is our number one priority and this is non-negotiable.”
“We will be back lending to our customers that need to access an Amigo loan as soon as we can, but do not envisage this being before 2021. We are fully aware of our responsibilities as a lender and the important role that we play for the millions of people in the UK that are unable to get a loan from a mainstream bank.”
The group has said it hopes to restart lending as soon as possible, however, expects this will not be before 2021.
Amigo Holdings shares (LON: AMGO) fell 13% to 7.47p in the first hour of trading. They are currently trading -20.93% at 6.79p (1426GMT).