A POTENTIAL buyer for Bournemouth’s sub-prime lender Amigo has pulled out as the company revealed it faced a £35million backlog of customer complaints.

Amigo said it was halting efforts to find a buyer after an unnamed suitor withdrew a £100m offer.

Amigo, based on Bournemouth’s Commercial Road, had announced in January that it was starting a formal sale process. It has said no other bidders came forward and it will call off the search.

It revealed on Monday that it had seen “a significant increase in customer complaints in recent weeks”.

Amigo lends money at an annual percentage rate (APR) of 49.9 per cent to those who can find a friend or relative to guarantee the loan.

Amigo being investigated by the Financial Conduct Authority

Last week, Amigo said the Financial Conduct Authority (FCA) had started an investigation into its assessment process for customers’ creditworthiness.

It said on Monday that it had agreed with the FCA to work through its backlog of complaints and expected the cost of clearing these to be “at least £35 million”, although it warned that this “could be materially higher”.

The company board said it would not give shareholders a dividend for the past financial year.

Amigo also revealed that its chairman, Stephan Wilcke, was to step down from the company at a date to be agreed in the coming days. He had already indicated last year that he would go.

Mr Wilcke’s departure comes amid a continuing row between the business and its founder James Benamor, whose Richmond Group holds a majority of its shares.

Amigo Loans triggers sales process amid "challenging" conditions

‘Several’ potential buyers interested in loan business Amigo

In April, Mr Benamor submitted a formal request for an emergency general meeting to oust all directors, including chief executive Hamish Paton and Mr Wilcke.

He accused the company’s existing management of presiding over a “dumpster fire”.

Mr Wilcke said: “I have chosen to resign now to make it crystal clear to everyone that the assertions made by Richmond Group about the motivations of myself and the board as clinging to our seats for our own ends are completely false.”

Amigo Loans told to give more information to guarantors

Amigo has been under increasing pressure from regulators and economic conditions in recent times.

Last year, it said it wanted to be a “role model” for the industry after being criticised by the FCA for the information it gives to potential guarantor.

The company was founded by James Benamor in 2005.

Richest people in Dorset and New Forest on Sunday Times list

He has previously been named Dorset’s richest man but dropped down the Sunday times Rich List this year after its authors estimated Amigo’s problems had wiped £501m from his fortune.