Ratesetter Release Delays

masonic

pioruns said:

masonic said:

pioruns said:

MinuteNoodles said:

The whole pyramid selling scheme which this basically is using as a method to repay investors is starting to fall apart since the 10 year bull run came to a dramatic end. One hopes you all didn't put money in you couldn't afford to lose.

What? Bull run come to an end? Looking at equity indices doesn't appear so. In fact, both China and US indices are in massive gain year to gate, NASDAQ +16% year to gate so far, S&P500 is 0% so moved nowhere, and Shanghai Composite +5%. So, what "dramatic end" of a bull run, again please?

I presume it's referring to P2P, not equities, since this thread is about Ratesetter.

Yeah maybe I misunderstood. To my sense, term bull run is (maybe mistakenly) reserved to equities and/or whole economy. Smaller markets can have a bubble, for example. But nevermind

You'll see that people quite commonly refer to there having been a bull market in bonds. P2P differs in that it is a more fragmented and restricted market, but people do invest and disinvest in the asset class according to how they feel. Bull and bear markets refer to investor sentiment, whereas a bubble refers to market valuation, so the two are distinct.

If we've learned anything from recent events at Ratesetter and other P2P platforms, P2P markets are driven by sentiment to a far greater extent than the stockmarket.

mikb

MinuteNoodles said:

The whole pyramid selling scheme which this basically is using as a method to repay investors is starting to fall apart since the 10 year bull run came to a dramatic end. One hopes you all didn't put money in you couldn't afford to lose.

I'm sure Ratesetter's legal team would be as fascinated as I am to hear what evidence you have for them running a "pyramid selling scheme" ?


The lack of liquidity is because a large number of people are trying to "withdraw" money that is out on loan to people/businesses, which is what Ratesetter do.


Ratesetter can't just call in the loans and demand full payment because a proportion of lenders have changed their mind.


Your early exit from these up-to-5-year loans (depending on market) was always based on a willingness of other people to pick up the contract *you* entered into to lend for that time.


That's not a pyramid scheme. In a pyramid scheme there would *be* no underlying loans and all repayments of capital and interest would be from other new money coming in as there would be no other source.


Investors are repaid from the ongoing capital and interest payments made by borrowers.


One hopes you didn't put *any* money in Ratesetter, as you don't seem to have the first idea about it.

[Deleted User]

Just received e-mail from RateSetter:

Your investment release request is complete

Your request to transfer funds from your investment has been processed.

The funds are now available to manage in your account.

Requested amount:All funds

My 5Year is sold. Withdrawn already, should be on my account tomorrow. Sadly, two investments worth total £15 were left behind, because anything under £10 cannot be sold. So I will have account open for another four or so years getting pennies every week -_- And maybe in four years amount I have in Access will get through the queue and will be available to withdraw too

Grogged

I have another 677 peeps ahead of me in the 5 year, I think I'll get my email sometime in August.
The small amount in Max should pay out in 2028! 😂

wizzards

As a lender I have found you can still get some cash back from ratesetter by doing the following.  Set the interest rate at +5% manually above the ratesetter set rate. This is the max you can set it.  I am doing this on the access and 1 year and 5 year options.
Login into ratesetter every morning and evening to withdraw cash thats not matched to lenders.  You can recover in excess of £1K a month.  It really depends also whether the loans you have are amortising or non amortising loans.  Not every repayment you get will be queued because of this.  This is working well for me and I hope to recover a large % of my money long before I reach the end of the lenders withdrawal queue !!

I don't think the above would work so well for an ISA if you want to transfer it but luckily I don't have one of those with ratesetter.  Also if you are unhappy post on Trustpilot.  I can see that ratesetter seem to only have borrowers reviews on that forum.  I think they promote the stats by sending borrowers a request to review hence getting their trustpilot score almost 5 stars.  They never send lenders any email to put a review on Trustpilot ?

JenniferK

mikb said:

MinuteNoodles said:

The whole pyramid selling scheme which this basically is using as a method to repay investors is starting to fall apart since the 10 year bull run came to a dramatic end. One hopes you all didn't put money in you couldn't afford to lose.

I'm sure Ratesetter's legal team would be as fascinated as I am to hear what evidence you have for them running a "pyramid selling scheme" ?


The lack of liquidity is because a large number of people are trying to "withdraw" money that is out on loan to people/businesses, which is what Ratesetter do.


Ratesetter can't just call in the loans and demand full payment because a proportion of lenders have changed their mind.


Your early exit from these up-to-5-year loans (depending on market) was always based on a willingness of other people to pick up the contract *you* entered into to lend for that time.


That's not a pyramid scheme. In a pyramid scheme there would *be* no underlying loans and all repayments of capital and interest would be from other new money coming in as there would be no other source.


Investors are repaid from the ongoing capital and interest payments made by borrowers.


One hopes you didn't put *any* money in Ratesetter, as you don't seem to have the first idea about it.

Lack of liquidity is also due to the fact that Ratesetter are not allowing new investors onto the platform.

wizzards

Lack of Liquidity is also due to the fact that Ratesetter are putting a lot of money into the provision fund rather than give it back or make it available for lending.    According to their setup this fund can also be used as follows its mentioned in their blogs:-

The blog explains: “The Provision Fund cannot invest in the equity of RateSetter (i.e. buy shares in it). However, a small proportion of the money in the Provision Fund can be used to provide temporary liquidity to the RateSetter market in order to bridge gaps between supply and demand for money, particularly in the case where a larger loan is approved. Less than 10% of the Provision Fund is currently used for this purpose. This liquidity is temporary – the cash must be returned to the Provision Fund within six months.”

I am not sure borrowing from the provision fund even if it's only 10% is a great idea.  It's great that there is a provision fund.   When I first started using ratesetter the "Access" account was called Rolling Market.  The word "Access" would suggest to many investors that they can easily access this account.  Therein lies the issue with the way this product is marketed.   Ratesetter could easily end up as another Lendy.  There is nothing to stop the provision fund being used for other things.  It was also being invested in low risk investments.  I can't find out now if this is still the case.

Also in the terms it says

The protection offered by the Provision Fund is limited to the value of the assets held in the Provision Fund at any point in time (the assets include cash and low-risk liquid investments). In the event that the assets are not sufficient to cover Expected Future Losses, investors are exposed to a loss of interest and, should the addition of the interest not be sufficient, a loss of capital. Investments are not covered by the Financial Services Compensation Scheme.

So if they have bad losses you will lose your money.  In a corona virus situation quite a few borrowers will have sadly lost employment so the provision fund will rightly be used to cover the losses.  How much provision fund is really needed only time will tell.  

Ratesetter also do amortising and non amortising loans which also can confuse lenders regarding repayments.  

I do wonder if Metro bank take over Ratesetter will they wind it up.  Metro bank as I understand it was interested in Ratesetters state of the art loan system software rather than its loan book.  Metro Bank like ratesetter is making an overall loss

masonic

JenniferK said:

mikb said:

MinuteNoodles said:

The whole pyramid selling scheme which this basically is using as a method to repay investors is starting to fall apart since the 10 year bull run came to a dramatic end. One hopes you all didn't put money in you couldn't afford to lose.

I'm sure Ratesetter's legal team would be as fascinated as I am to hear what evidence you have for them running a "pyramid selling scheme" ?


The lack of liquidity is because a large number of people are trying to "withdraw" money that is out on loan to people/businesses, which is what Ratesetter do.


Ratesetter can't just call in the loans and demand full payment because a proportion of lenders have changed their mind.


Your early exit from these up-to-5-year loans (depending on market) was always based on a willingness of other people to pick up the contract *you* entered into to lend for that time.


That's not a pyramid scheme. In a pyramid scheme there would *be* no underlying loans and all repayments of capital and interest would be from other new money coming in as there would be no other source.


Investors are repaid from the ongoing capital and interest payments made by borrowers.


One hopes you didn't put *any* money in Ratesetter, as you don't seem to have the first idea about it.

Lack of liquidity is also due to the fact that Ratesetter are not allowing new investors onto the platform.

That's such a bad move I had to double check you were actually correct. To solve the lack of liquidity they should welcome new lenders and pause new lending, but it seems they have done the opposite.

MinuteNoodles

mikb said:

I'm sure Ratesetter's legal team would be as fascinated as I am to hear what evidence you have for them running a "pyramid selling scheme" ?

You can't get your money out until others put money in. Robbing Peter to pay Paul. Literally how ponzi and pyramid schemes function.

And no I don't have money in Ratesetter because I'm not an idiot who is stupid enough to lend to people that the biggest banks in the world with centuries of experience of calculating risk deemed too risky to lend to.

wizzards

MinuteNoodles said:

mikb said:

I'm sure Ratesetter's legal team would be as fascinated as I am to hear what evidence you have for them running a "pyramid selling scheme" ?

You can't get your money out until others put money in. Robbing Peter to pay Paul. Literally how ponzi and pyramid schemes function.

And no I don't have money in Ratesetter because I'm not an idiot who is stupid enough to lend to people that the biggest banks in the world with centuries of experience of calculating risk deemed too risky to lend to.

I would agree that it's hard to get money out.  I would also say just like the "Lendy" who sponsored Cowes week prior to their downfall that anything could happen.  Worst case Metro bank buys Ratesetter.   There is nothing to stop them using the provision fund for other things and winding up the peer to peer part of the business for general public and moving more into commercial loan arrangements.  
Ratesetter has not made a profit unlike Zopa.  Metro Bank also has a non profitable balance sheet.   You can actually get money out of ratesetter by upping the interest rate by +5% and taking it out daily or twice daily before Ratesetter manage to lend it out again.  Rather than wait years to get your cash back you might get quite a bit of it back.    Ratesetter has managed to keep their trustpilot rating just under 5 ***** probably by mailing borrowers and getting them to review.  Lendy had a good rating just before it collapsed.  Realistically are all the borrowers going to pay off their loans ?  There answer is clearly "NO".  Many have lost jobs so the defaults are much higher than before.  
If you are brave or foolish enough to invest in peer 2 peer you risk cash losses.  If you can't afford to lose money you shouldn't invest or risk it without understanding.  However when a peer 2 peer account is called "Access" the general public may think that this means it is fully accessible.