Funding Circle moving the goalposts

max...

I will not be alone here but am pretty disgusted with FC and the treatment of investors. Yes, we know the risks but there is an ethical way of doing things.

This is with reference to the changes coming into effect on Monday 2nd Dec with regard to loan 'selling' of parts. I was made aware of this yesterday in an email. I have not received any prior notice via email or post.

My loan parts have been on sale since June when advertised times were IIRC around 2 months or so. This steadily increased and they no longer show average selling times for obvious reasons.

So now through no fault of our own we will be transferred into the new system and be charged 1.25% for the privilege as well as seeing the loan no longer sold as a whole but in bits over an even longer period.

Given the lack of written info on this can they really force this change on investors? It seems totally unethical for those who agreed to invest/sell under the prior rules.

As I say I an aware of the risk with P2P but this is not the beef, the issue is being shoved back in the queue and charged a fee on top.

masonic

FC is obliged to allow you to reject the unilateral change to your agreement, and allow you to dissolve the contract without penalty, meaning you should be able to liquidate your investments under the existing terms (no fee) and then close your account.

max...

Apologies as I am not clear from your answer but are you saying the same as FC told me yesterday - the only other course of action is to cancel the laon parts 'sale' and continue to pause 'investing' and wait for the dribble of loan repayments over many years to come?

masonic

No, if you tell them you reject the changes to the T&Cs and want to close your account, it's fair and reasonable for them to allow your loan parts to remain for sale with no fee applicable to them. If they disagree, raise a formal complaint and if necessary take it to the Financial Ombudsman.

max...

Thank you, I will certainly pursue that line.

dont_use_vistaprint

How things have changed I remember selling £3K of loans in 20-mins , Still forecasting pretty good returns of 7.5% even with higher defaults this year.

max...

Those forecasted returns are pie in the sky. We've 'invested' with them for three years or so and initially returns were fair but defaults steadily increased to a ridiculous level wiping out any meaningful return.

Mr.Saver

For this reason, I've contacted FC support, asked them to sell all my existing loan parts under the old rule, transfer out the proceeds, and then close my account with them.

max...

I'm not sure it's as simple as that. I started the ball rolling yesterday with a 'formal' complaint but these P2P accounts will need to be left 'open' for years to try and claw back the dribble of bad debts.

We cannot force them to sell our loans - it's supply and demand after all but I believe they should not be allowed to force us to be put to the back of the queue and lose an additional 1.25% on top of the lost interest. Anyone who sold out before May seems to have been lucky - I've been selling since June and nothing has gone yet. I just slowly remove the dribble that comes in every other day but there is a long way to go with a lot (too much) that I foolishly invested in the 'good' times.

bigadaj

I'm not sure you would term the May sellers as lucky or shrewd.

I sold out of Lendy a couple of years ago, not so much lucky or shrewd as seeing the writing on the wall.

Events moved far more quickly with collateral so was arguably both naive and unlucky, p2p seems like a dying sector currently.

cautious1

I was unaware of this thread and started another one with:
______
Most people with an interest will know that FundingCircle have recently introduced a 1.25% "charge" when investments are sold to extract funds, and have also reset the selling queue. The way this change was introduced did not give investors any choice, and that was unfair and shows a lack of consideration. I started trying to sell in June and had not reached the front of the queue (although, I must have been close) when the charge was introduced about 160 days later. There was nothing that I, or other investors, could do; we were forced to accept a change that was detrimental to our situation.

FC say that there are a number of choices:

1. continue to sell under new Ts&Cs (a 1.25% hit, the queue position is lost and the timescale is unknown)
2. stop selling and investing (withdraw funds as investments pay back, on an unknown timescale)
3. notify FC that the investor wishes to close their investment account (they don't say how this is possible without selling investments)
4. escalate to the financial ombudsman

... #3 seems to be impossible. I've chosen 2 and 4.
____________

Masonic suggested insisting on selling under the old terms but I don't see how this would work. Investors buying from those selling on the new Ts&Cs would be buying with a 1.25% discount, so why would any new investor buy on the old Ts&Cs?