London Capital and Finance

masonic

Jelli wrote: »

It has never been about understanding risks with these offers. If a website says "your investment could be at risk if we're operating in bad faith", then yes, fair do's. But we're mixing agreeing to the perils of a legitimate offer with something that's set up to be total bs.

So losing money because of a risky failed investment has nothing to do with these high interest offers. It's just highbrow bs.

You should not need to be told "your investment could be at risk if we're operating in bad faith". That's always true when you don't have the FSCS to fall back on... and you never have the FSCS to fall back on when you are being offered fixed rates of interest 3-4 times higher than the best savings accounts.

Jelli

But they're advertising to the general public that they're FCA regulated, even though it's only relevant to the borrowers. So that's when people think the risk is an honest risk, not a dodgy set up.

I've spoken to many investors who felt safe by seeing "FCA" shown on the website.

masonic

Jelli wrote: »

But they're advertising to the general public that they're FCA regulated, even though it's only relevant to the borrowers. So that's when people think the risk is an honest risk, not a dodgy set up.

I've spoken to many investors who felt safe by seeing "FCA" shown on the website.

All of the significant P2P lending companies are now FCA Authorised, but that doesn't mean investments in P2P are safe. Here is some recovery data from 6 P2P loans from 2 FCA authorised P2P firms:

FCA authorised P2P firm 1:
Loan #1: £100,000 lent, secured on assets valued at £3,500,000 (3rd charge loan), 100% capital loss
Loan #2: £530,000 lent, secured on assets valued at £800,000, 98% capital loss
Loan #3: £1,000,000 lent, secured on assets valued at £1,600,000, 70% capital loss

FCA authorised P2P firm 2:
Loan #1: £1,050,000 lent, secured on assets valued at £1,500,000, 83% capital loss
Loan #2: £3,430,000 lent, secured on assets valued at £4,800,000, 61% capital loss
Loan #3: £3,250,000 lent, secured on assets valued at £5.000,000, 43% capital loss

These firms are still trading, and the FCA has taken no action against them. Do you still think having "FCA" shown on the website means an investment is safe?

Even though bondholders were not investing in regulated P2P as some of them might have believed, I don't think they'll suffer a worse outcome than they would have done if it really was regulated P2P.

Supercalafragalistic

Masonic,.... no,but the general public might. Not everyone is well informed. I thought fca protection referred to fscs ...i didnt distinguish between the two. Nor, would i imagine, would a lot of people. And thats why these companies have been successful in gaining investors money. False advertising i would say.

masonic

Supercalafragalistic wrote: »

Masonic,.... no,but the general public might. Not everyone is well informed. I thought fca protection referred to fscs ...i didnt distinguish between the two. Nor, would i imagine, would a lot of people. And thats why these companies have been successful in gaining investors money. False advertising i would say.

I understand that not everyone is well informed. That's why we always say don't invest in anything you don't understand and if it looks too good to be true it probably is. I'm afraid if you go around assuming everything you can find on the internet is safe you are going to get into trouble and that will never change.

The first time the LCF website mentions the FCA and FSCS this is what is written:

https://web.archive.org/web/20161014050705/https://www.londoncapitalandfinance.co.uk/
How can LC&F offer market beating interest rates for investors?
London Capital & Finance Plc is a leading provider of loans to UK businesses. We typically charge borrowers between 12-20% per year which means we are able to pass on higher interest rates to our investors, like you.

London Capital & Finance Plc is incorporated in England and Wales under the Companies Act 2006 as a Public Limited Company with registered number 08140312. We are regulated by the Financial Conduct Authority for credit broking and our registered number is 722603. Investments into the LC&F bond are not protected by the Financial Services Compensation Scheme (FSCS).

Jelli

What's the point of them telling us they're regulated to serve other people? It's like me saying I offer FSCS protection or FCA regulation but the small print says "only for your neighbours". Also a lot of people never knew it's possible to be partially regulated, which is what caught many people out. It's like finding out that only the car park belonging to First Direct's head office is regulated.

masonic

Jelli wrote: »

What's the point of them telling us they're regulated to serve other people? It's like me saying I offer FSCS protection or FCA regulation, but the small print says "only for your neighbours". Also a lot of people never knew it's possible to be partially regulated, which is what caught many people out. It's like finding out that only the car parks belonging to First Direct are regulated.

Nobody has FSCS protection and that is made clear on the website and in all of the financial promotions you uploaded in an earlier post. None of the financial promotions you uploaded mention anything about the FCA authorisation status of LCF and the website was clear that LCF only had authorisation for credit broking. The website is there for both borrowers and lenders, so it is appropriate to mention the authorisation for credit broking, especially as it is made clear in the same passage that bondholders have no FSCS protection.

It would have made little difference if LCF had FCA authorisation to offer P2P loans and that's how you invested your money. You still wouldn't have had FSCS protection. If you were investing in a mainstream regulated investment bond issued by LCF, you'd still have no FSCS protection against losing money as a result of LCF becoming insolvent.

Even though it was an unregulated investment, the FCA still required LCF to classify you according to your experience making investments and for restricted investors make you agree not to invest more than 10% of your net assets in the bonds. From the documents you've uploaded, it is clear that they did just that. If it was FCA regulated P2P they wouldn't have needed to do that.

In your first post in this thread you stated that you understood the risks as presented in the documentation relating to the bonds. The lack of FSCS protection was clearly listed in the risks:

Realistic

Investors like being told loans are secured on assets like property because property is tangible and they don’t think they can lose. They also don’t like paying for advise.

As the administrators stated yesterday it needed a loan return of over 44% to repay a 1 year bond investor due to 25% Surge fee for loan sourcing and administration plus 3% for LCF so only 72% of loan monies advanced were available to invest to repay investors their loan 100% plus interest a year later.

Only very high risk investments will ever pay off 44% in a year and most of the time returns will be lower or negative.

So the reality is that the faster LCF expanded the bigger the hole grew. Much of the subsequent capital losses will be interest paid to earlier investors. The lucky few who invested early and then stopped with be only winners.

masonic

The real winners are those behind Surge Financial and LCF. Nobody who invested in the bonds was adequately rewarded for the risk they took on.

Sledger

eskbanker wrote: »

If a post is deleted then all subsequent ones are renumbered by one, i.e. the post numbering reflects surviving posts only.

Why would you consider it necessary to keep records of what's posted on here, i.e. what would you actually use them for?

I was looking for Elten Goldings posts but all reference to him seems to have been removed