Hypocrisy of the loan shark billionaire Sy loan shark of the
A Lib Dem supporter, he paints himself as a friend of the poor and champions noble causes. Yet James Benamor has made his fortune by exploiting society’s most vulnerable
TO TROUBLED kids he met in Manchester’s notorious Moss Side, ‘James’ was a thirtysomething youth worker making a TV documentary about their crime-ridden lives. Scruffy and somewhat shy, he spent a week driving a battered Nissan Micra around the local streets, meeting victims of drug addiction, gang violence and other social problems facing this under-privileged community.
What the TV producers had not told the Mancunians was that James was, in fact, a wealthy businessman from Bournemouth who’d agreed to appear in the Channel 4 show The Secret Millionaire.
At the end of the programme, he revealed his true identity, adding that his real car was a bright yellow Lotus convertible, and proudly declaring: ‘ For the past decade, I’ve been running my own very successful finance company.’
Then, in keeping with the syrupy TV format, James Benamor — to use his full name — signed a series of big cheques for local charities and youth projects.
Today, the flash 41-year- old entrepreneur is no longer a mere millionaire. And there’s nothing very secret about him, either.
In fact, Benamor recently became Britain’s most newly minted billionaire.
This is the result of his successful finance company, a household name, being floated on the stock market at a price that left him with an estimated fortune of £1.1 billion.
The windfall fuels an ultraglamorous existence that has, in recent years, been chronicled via Facebook, Instagram and Twitter accounts showcasing endless exotic holidays and extravagant family outings.
AFATHER-OF-EIGHT, he lives with Marina goland (the American mother of his youngest three kids) in a six-bedroom mansion down a tree-lined, 100yard drive in the exclusive Branscombe Park neighbourhood of the Devon seaside town.
When he bought the property, for just over £2 million in 2013, the 7,000 sq ft ‘substantial residence of immense charm and character’ came with a new 55ft kitchen, hen, plus planning permission for or a pool, gym, games room, sauna a and home cinema.
It’s conveniently located just t a mile from his previous home, , which is occupied by Catriona a Patterson, the 49- year- old d mother of his five elder r children who was company y secretary to several of his firms s when they were together in the he early Noughties.
Like many a self-made man, n, he owes this enviable lifestyle le to a mixture of luck, hard work rk and old-fashioned cunning.
Born rachid James Benamor or and educated at Poole le grammar School, the son of Tunisian immigrants claims to have been an unruly teenager ger who ‘was taking a lot of drugs, gs, became a petty criminal really’. y’.
‘I was a nightmare,’ he told old viewers of The Secret Millionaire. aire ‘I was a nightmare for my parents. I was a nightmare for anyone that knew me. There were several occasions where I could have ended up in prison.’
The business career he began in the late Nineties would, of course, set things on a different path.
These days, Benamor cultivates a man- of- the- people image, using social media to trumpet charitable exploits that include climbing Mount Kilimanjaro and funding schools in Africa, as well as his occasional ventures into the boxing ring.
he also launches occasional attacks on Theresa May, asking followers during the last general election: ‘Is anyone going to admit that they are voting Tory?’ (he’s declared himself a Lib Dem supporter).
Yet behind this trendy facade lies a profoundly disturbing fact, which is that his highly-successful ‘finance company’, Amigo Loans, is one of the most controversial, and (some say) ruthless loan companies in Britain.
Founded in 2005, it controls roughly 88 per cent of the UK market for so-called ‘guarantor loans’, a high-interest form of lending aimed at people who are unable, usually due to a chequered financial history, to borrow cash via conventional means.
Under a ‘guarantor’ agreement, these high-risk customers (who, according to Amigo’s website, can be former bankrupts and are not even required to have jobs) must find a friend or relative prepared to ‘ guarantee’ their debt by becoming liable for any failure to repay it.
They can then borrow between £500 and £10,000 over a period of 12 to 60 months. During that time, Amigo charges an interest rate of 49.9 per cent. According to Amigo’s website, this means that a customer who takes out a £5,000 loan, for example, will, over five years, repay £11,857.20.
Should they fall behind with repayments, their ‘guarantor’ will be pursued and, if necessary, dragged through the courts.
It is a very profitable enterprise. Last year, Amigo — which has a subsidiary in the tax haven of Luxembourg — declared profits of £72 million.
Its accounts show that it employs around 300 people, has outstanding loans worth a total of £647 million to 180,000 Britons, and makes on average £400 each year from each of its ( often impoverished) clients. For some, the company obviously provides a positive service: extending credit to those excluded by other, more conventional, providers and helping people with poor credit ratings build a credit history.
The company argues that it ‘provides access to healthy and responsible funding to those who have traditionally been left out by the mainstream lenders’. In an email, Benamor went further,
alleging that the loan firm (from which he stepped down as chief executive four years back) will somehow ‘change the world for the better for millions of people’.
Yet critics regard Amigo’s business model as deeply exploitative, saying it cynically capitalises on the ignorance and desperation of uninformed and sometimes vulnerable clients.
Among them is Stella Creasy, the Labour MP who has long campaigned against the excesses of the credit industry. She has called Amigo ‘legal loan sharks’, saying the company ‘needs to be cracked down on by the regulators’.
‘If your friends are giving you Amigo loans, you don’t need enemies,’ she says.
Awkwardly, given Benamor’s professed interest in social justice, her fellow Labour MP Wes Streeting has accused the firm of shamelessly exploiting the workingclasses, saying it makes money by ‘taking advantage of some of the poorest people in society’.
Despite their views — and to the dismay of Labour colleagues — Amigo was controversially allowed to host a ‘roundtable’ event on ‘responsible lending’ at Labour’s last party conference in Brighton.
Elsewhere, Citizens Advice has warned that many guarantors who take out such products from loan companies in general are ‘unknowingly trapping themselves with enormous debts’.
To recruit more customers, in the face of such criticism, Amigo has spent £62 million on an aggressive advertising campaign, which it continues to finance to the tune of £2 million a month. Around 98 per cent of British adults have now seen one of its commercials, according to research. They feature cuddly Plasticine ‘friends’ who help downontheirluck individuals negotiate their daily lives, usually to a soundtrack of uplifting music. Their slogan is ‘Start your story today’.
Inevitably, such stories too often end in tears.
Consumer rights champion Martin Lewis has said adverts describing Amigo’s loans as affordable left him feeling ‘slightly sick’.
MARTYN JAMES, of the consumer rights site resolver, adds: ‘There’s a twisted kind of genius going on here in the way they brand themselves. Forget the Plasticine models: there’s nothing fluffy or cuddly about what Amigo does.
‘I’ve always hated their form of lending. It’s rather grubby.’
Ingeniously, Amigo has been able to sidestep recent regulations designed to protect the public from the excesses of the payday and doorstep loan industry.
The new regulations mean such outfits as Wonga now have to cap the amount they can take from a customer in interest and fees at 100 per cent of the original loan.
If similar limits were applied to Amigo, the firm would be allowed to levy a maximum of £10,000 in repayment of a £5,000 loan — much less than it actually charges.
However, the rules do not affect socalled ‘ guarantor’ loans, thus creating a loophole. Unsurprisingly, many customers feel deeply disgruntled at some of the firm’s business practices.
The Financial Ombudsman Service, which regulates the credit industry, says it got 80 complaints against Amigo in the six months leading up to last Christmas. Over 2017, they were arriving at a rate of one every 48 hours.
It upheld a third of them and has published details of some of the most serious cases.
One saw a ‘ severely ill’ woman allowed to act as guarantor to her soninlaw, despite the fact that, according to the adjudicator, ‘she was never in a position to make the repayments’.
In another, a man described by doctors as having ‘ moderate learning difficulties’ and ‘ very poor understanding and comprehension’, along with an ‘inability to make rational and reasoned decisions’ was signed up. When Amigo learned of his medical condition, it refused to remove him from the loan agreement, until the Ombudsman intervened.
Another complainant, named as Mrs W, was asked on a recorded call to hand over her debit card details to ‘ confirm her ID’, only for the information to be used to extract money from her bank account without her informed consent.
In its defence, Amigo says the complaints represent only a tiny proportion of the loan agreements the company issues and points out the vast proportion of customers are satisfied with their service.
The firm claims: ‘ We take our responsibilities to our customers very seriously,’ and says it enjoys enviable ratings on websites where financial products are reviewed. It stresses that only about 8 per cent of all loan payments are missed by its customers, forcing their ‘guarantor’ to step in. And fewer than 50 per cent of guarantors are believed to be required to dip into their pockets.
While the firm’s supporters believe that those figures are relatively low (at least by the ropey standards of the often predatory loan industry), critics insist they are far too high.
Wherever you stand, Amigo isn’t the only firm associated with Mr Benamor to have been accused of what one might call sharp practices. In 2009, he was revealed to be behind a bewildering array of companies said to be running a scheme that involved persuading customers who had poor credit ratings to pay a £50 ‘brokerage fee’, in the hope of being given a loan.
A BBC investigation revealed that a huge number of disgruntled customers of his firms — which had such names as Loanfinder, Credit Gain Services and Post net — were given contact details of other lenders in return for the cash. Many did not end up receiving a loan.
Mr Benamor denied dishonesty. However, the Office of Fair Trading, which was, at the time, regulating the industry, found that his businesses were ‘misleading customers by falsely guaranteeing access to credit’ and ‘failing to properly refund fees to customers when it was unable to broker suitable credit’.
More recently, a series of unhappy clients have complained that Amigo has betrayed a distinct lack of sensitivity when circumstances have left them struggling to repay loans.
One elderly couple called Glynn and Kelly Parry recently told reporters that Amigo had attempted to place a charge on their £79,000 home in Cleethorpes, Lincolnshire, after they were guarantor for a relative who defaulted on a £5,000 loan. They are due in court in August.
Last month, an electrician from Oxford called ryan Gilkes said he was given just an extra week to find £298 to cover his monthly repayment to the firm after suffering a blood clot that left him blinded in one eye and temporarily unable to work.
He said he was ‘hounded’ while he attempted to recover and has been told that he now owes more than £18,000, having borrowed a total of £7,500.
Amigo insisted it had been ‘flexible’ and ‘keen to help him’ work out a recovery plan, but cancelled his arrears as a goodwill gesture.
Then, a fortnight ago, freelance writer Eugene Costello told the
Sunday Times how a friend who agreed to act as his guarantor ended up being bombarded with calls from the firm when he fell behind with payments.
‘Miss a payment by a single day with Amigo and it will notify your guarantor,’ he wrote. ‘Within a week, in my experience, it will be piling on the pressure, warning them that their credit rating will be adversely affected if they do not settle that month’s sum.
‘The day you miss a payment they start getting quite nasty. They seemed so ruthless. So quick to step on you.’
For all this bluster, when it comes to his own debts, James Benamor doesn’t always seem keen to pay his own dues.
According to court records, he has a £4,390 county court judgment outstanding against him at Northampton County Court, due to an unpaid bill dating back to 2013.
He said he was unaware of its existence when we spoke, suggesting he was the victim of ‘some sort of mistake’.
While we must take him at his word, recent events mean that he’s probably in a position to pay it off, anyway.
If not, he could always take out a loan — but presumably at less than the 49.9 per cent interest rate his firm charges.