A U.K.-based financial services firm that used automated decision-making to drive sales over ensuring whether customers posed credit risks dodged a penalty of 72.9 million pounds (U.S. $88.7 million) because it can’t afford to pay while reimbursing customers.

Amigo Loans specialized in giving loans to customers with poor credit histories that traditional lenders would avoid, typically charging interest rates of up to 49.9 percent. The company was “overly focused on profitability and ‘getting loans out the door,’” according to the U.K. Financial Conduct Authority (FCA).

Amigo ramped up business by increasing the use of its information technology (IT) systems to automate loan decisions while decreasing the use of human agents so applications could be approved and processed more quickly. By November 2018, Amigo’s lending model was so heavily automated its loan decision-making depended on pre-programmed, box-tick parameters set by the IT department, the FCA stated in its final notice published Tuesday.

The agency said such an approach—which continued until March 2020—meant there was a significant risk that “decision-making was, to a significant degree, dependent on IT system logic.”

While Amigo had controls in place to prevent lending to customers who would not be able to comfortably afford to repay the loans, the FCA said they were “insufficient.” Design issues meant loans were approved despite indicators—and even evidence—borrowers would struggle to repay them, thereby harming both customers and guarantors, according to the agency.

One in four Amigo guarantors were asked to step in and make payments to assist struggling borrowers during a loan’s life cycle, the FCA said.

Although Amigo’s systems raised flags for manual review in some instances, staff did not always sufficiently question the information provided before approving a loan—partly because agents were financially incentivized to sell, the FCA said.

The agency also found concerns raised by internal audit and compliance from mid-2019 were not addressed. Both functions found there was poor recordkeeping, a lack of an effective risk management framework, and that the firm exercised a narrow definition of what constituted potential customer vulnerability.

The compliance function was also criticized for a lack of horizon scanning and compliance advice.

The FCA decided to censure Amigo as the intended fine would have prevented it from repaying customers under a High Court-sanctioned plan agreed to last year that enables the firm to provide redress while continuing to conduct business.

Amigo did not respond to a request for comment.