Ratesetter Release Delays

ZeroSum

bluenun said:

ZeroSum said:

wizzards said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

No you don't get your money back when the borrower makes the monthly repayments because ratesetter immediately lend it out again. In the access account which is the most common one for persons to have  "You only get your money back when liquidity is enough for them to pay it back"  Ratesetter are still making new loans ? or using your repayments to fund persons in the front of the repayment queue.   So if you are lender and in position 18000 in the withdrawl queue and your borrowers make the monthly payment part goes in the provision fund, the rest of it goes to pay the persons at the front of the queue.
If you look at the figures they show to date the amount of borrowers far exceeds the lenders.

Key figures July 2020

Total amount lent 3,971,826,502

Total amount under management 743,856,698

Provision Fund cash balance 6,260,186

Expected Provision Fund Inflows 19,275,113

Total repayments made by borrowers 3,182,577,282

Total repayments made by Provision Fund 215,895,599

Total repaid to investors 3,398,472,882

Total interest returned to investors 176,475,090

Liquidity provided. i.e. Total Sell Outs 908,153,058

Total number of matches 61,095,170

Investors 86,920

Borrowers 683,493

Total number of loans 833,343

Average term of loans 27

Average remaining term of outstanding loans 19

There's an option on the lending settings to return funds to holding account. It's only the access option that doesn't allow this, which all you do it set your lending rate to 10% so it doesn't get lent out.
So yes, you do get your money back in monthly installments.

I've got a few quid in ratesetter, and have been managing fine to withdraw my monthly repayments

I did not know about this and I have an Access account.
I requested to withdraw my funds in March 2020 and I am 6610 in the queue.
I have set my reinvestment % to 8 and get a few quid every couple of weeks that way.
I went to the lending settings and clicked 'release investment to holding account' but of course I cannot because I have asked to withdraw all my funds in March.
Could I cancel that request and then would I be able to release my investment to my holding account, and withdraw to my bank account?

I think you're misunderstanding. 

The move to holding account is just so the monthly repayments don't get reinvested. If you cancel your release request it won't be released, so don't do that if you want it all back

wizzards

bluenun said:

ZeroSum said:

wizzards said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

No you don't get your money back when the borrower makes the monthly repayments because ratesetter immediately lend it out again. In the access account which is the most common one for persons to have  "You only get your money back when liquidity is enough for them to pay it back"  Ratesetter are still making new loans ? or using your repayments to fund persons in the front of the repayment queue.   So if you are lender and in position 18000 in the withdrawl queue and your borrowers make the monthly payment part goes in the provision fund, the rest of it goes to pay the persons at the front of the queue.
If you look at the figures they show to date the amount of borrowers far exceeds the lenders.

Key figures July 2020

Total amount lent 3,971,826,502

Total amount under management 743,856,698

Provision Fund cash balance 6,260,186

Expected Provision Fund Inflows 19,275,113

Total repayments made by borrowers 3,182,577,282

Total repayments made by Provision Fund 215,895,599

Total repaid to investors 3,398,472,882

Total interest returned to investors 176,475,090

Liquidity provided. i.e. Total Sell Outs 908,153,058

Total number of matches 61,095,170

Investors 86,920

Borrowers 683,493

Total number of loans 833,343

Average term of loans 27

Average remaining term of outstanding loans 19

There's an option on the lending settings to return funds to holding account. It's only the access option that doesn't allow this, which all you do it set your lending rate to 10% so it doesn't get lent out.
So yes, you do get your money back in monthly installments.

I've got a few quid in ratesetter, and have been managing fine to withdraw my monthly repayments

I did not know about this and I have an Access account.
I requested to withdraw my funds in March 2020 and I am 6610 in the queue.
I have set my reinvestment % to 8 and get a few quid every couple of weeks that way.
I went to the lending settings and clicked 'release investment to holding account' but of course I cannot because I have asked to withdraw all my funds in March.
Could I cancel that request and then would I be able to release my investment to my holding account, and withdraw to my bank account?

I would say the answer is a clear NO.   For the ACCESS account I think you would certainly end up at the back of the queue which is currently at about 18500 persons waiting.  For the MAX and PLUS account I have no idea what the options are.

ZeroSum

wizzards said:

Sailtheworld said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

The business model is based on Northern Rock's although, rather cleverly, there's nowhere to go and queue to get money back and the T&Cs have been worded such that if there is a run it can be turned into a slow run that might allow sufficient time for the model to recover.

It is a classic slow run. People coming up with special workarounds to extract cash, special virtual queues (which are basically made up) and bonuses being swapped for the promise of bonuses.

P2P isn't equivalent to a savings account and the higher interest rates on offer should've made this patently obvious there must be additional risk but we shouldn't kid ourselves that lots of people (most?) did see P2P as equivalent to savings. We also shouldn't kid ourselves that the senior teams at P2P aren't meeting up every morning to try and think up new ways to prevent payments out.

If people weren't trying to extract funds I'm sure everything would be OK but, no matter how irrational it is to try and extract cash, the worst place to be when that runs starts is at the back of the queue.

Exactly.   Some persons are panicking.  The same happened at Lendy.  It's just like if there is a run on the banks they run out of cash.  As an investor my view is if you can't afford to lose your cash P2P is not the right thing to invest in.  Also as a business why would ratesetter want to sell out its business to Metro Bank who is also a loss business ?  Someone will profit from that but for sure it won't be the people lending at ratesetter.

I am also thinking if you had to update the government mandated "appropriateness test" for lenders because of a change in circumstances how does that affect lending.  In real terms there could be people as a result of the Corona virus who no longer meet the criteria for certain categories of investor ?  ZOPA for example make investors periodically renew their declaration.

You're wrong on just about everything you said. 
Lendy were pretty much pushed into admin by the FCA cos they were doing stuff they shouldnt have been. 

It's not quite the same as a bank run, as ratesetter don't have the money, theyre just the administrators

Ratesetter don't want to sell to metro. Metro want to buy, but ratersetter are preferring a merger. 

wizzards

mikb said:

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 ...

Well, I'm glad you have the courage to stand by your wrong opinion, factually incorrect and libellous as it is.


I'm able to withdraw money each month from Ratesetter. The loans Ratesetter made are being repaid, with interest (albeit reduced), and that money can be withdrawn.


As to your final comment, I'll leave others to decide your status on that one.

I don't think that applies to the Access account ?   The money isn't going to the holding account or at least not for more than a few hours if your lucky.  So its would seem the account thats supposed to be easy Access is the least easy to access !   

wizzards

ZeroSum said:

wizzards said:

Sailtheworld said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

The business model is based on Northern Rock's although, rather cleverly, there's nowhere to go and queue to get money back and the T&Cs have been worded such that if there is a run it can be turned into a slow run that might allow sufficient time for the model to recover.

It is a classic slow run. People coming up with special workarounds to extract cash, special virtual queues (which are basically made up) and bonuses being swapped for the promise of bonuses.

P2P isn't equivalent to a savings account and the higher interest rates on offer should've made this patently obvious there must be additional risk but we shouldn't kid ourselves that lots of people (most?) did see P2P as equivalent to savings. We also shouldn't kid ourselves that the senior teams at P2P aren't meeting up every morning to try and think up new ways to prevent payments out.

If people weren't trying to extract funds I'm sure everything would be OK but, no matter how irrational it is to try and extract cash, the worst place to be when that runs starts is at the back of the queue.

Exactly.   Some persons are panicking.  The same happened at Lendy.  It's just like if there is a run on the banks they run out of cash.  As an investor my view is if you can't afford to lose your cash P2P is not the right thing to invest in.  Also as a business why would ratesetter want to sell out its business to Metro Bank who is also a loss business ?  Someone will profit from that but for sure it won't be the people lending at ratesetter.

I am also thinking if you had to update the government mandated "appropriateness test" for lenders because of a change in circumstances how does that affect lending.  In real terms there could be people as a result of the Corona virus who no longer meet the criteria for certain categories of investor ?  ZOPA for example make investors periodically renew their declaration.

You're wrong on just about everything you said. 
Lendy were pretty much pushed into admin by the FCA cos they were doing stuff they shouldnt have been. 

It's not quite the same as a bank run, as ratesetter don't have the money, theyre just the administrators

Ratesetter don't want to sell to metro. Metro want to buy, but ratersetter are preferring a merger. 

Why would Metro Bank buy or merge with Ratesetter other than they want the software and systems that Ratesetter uses.  Why would ratesetter be in discussions to sell or merge if their business is doing so well ?   It takes two to make a sale or merger.  I would agree Metro Bank is the most interested party.  But someone is going to make some cash if they buy it ?

I agree Lendy is a different case entirely and its portfolio of investments was mainly properties and its now under investigation regarding the management of funds etc.    I used Lendy as an example of a worse case of P2P and how people also wanted their cash out as quickly as possible.  There are many other examples where people lost faith and decided to bale out.

However 18000 - 20000 or more persons out of a total of 86920 borrowers want their cash from the Access account.  As a % of the total lenders thats 20 % approx.    I would call that a run to get cash out.  In time it may become even more given that liquidity may not increase.

The provision fund is held by RateSetter Trustee Services Limited (“RTS”), and yes it provides some good cover and is protected.
"Who does the Provision Fund belong to? The assets held in the Provision Fund are owned by RTS, which is wholly owned by RateSetter. These assets are ring-fenced from the other assets of RateSetter. The Provision Fund’s assets can be used only to reimburse RateSetter investors and to cover the operational costs of the Provision Fund (for example, third party debt collection agencies that may be used to help recover money from borrowers, and the cost of the annual audit of RTS). If the Provision Fund accumulates a surplus relative to losses, this surplus ultimately belongs to RateSetter"
How would money in the Provision Fund be treated in the scenario that RateSetter became insolvent? The money in the Provision Fund cannot be used to settle the obligations of RateSetter in the event of an insolvency of any entity in the RateSetter Group of companies. There is a security structure in place to prevent the flow of funds from RTS to RMM (unless, as stated above, there is ultimately a surplus in the Provision Fund relative to losses). RateSetter commits to ensure the Provision Fund continues to receive the allocated fees paid over the term of the loans.

ZeroSum

wizzards said:

ZeroSum said:

wizzards said:

Sailtheworld said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

The business model is based on Northern Rock's although, rather cleverly, there's nowhere to go and queue to get money back and the T&Cs have been worded such that if there is a run it can be turned into a slow run that might allow sufficient time for the model to recover.

It is a classic slow run. People coming up with special workarounds to extract cash, special virtual queues (which are basically made up) and bonuses being swapped for the promise of bonuses.

P2P isn't equivalent to a savings account and the higher interest rates on offer should've made this patently obvious there must be additional risk but we shouldn't kid ourselves that lots of people (most?) did see P2P as equivalent to savings. We also shouldn't kid ourselves that the senior teams at P2P aren't meeting up every morning to try and think up new ways to prevent payments out.

If people weren't trying to extract funds I'm sure everything would be OK but, no matter how irrational it is to try and extract cash, the worst place to be when that runs starts is at the back of the queue.

Exactly.   Some persons are panicking.  The same happened at Lendy.  It's just like if there is a run on the banks they run out of cash.  As an investor my view is if you can't afford to lose your cash P2P is not the right thing to invest in.  Also as a business why would ratesetter want to sell out its business to Metro Bank who is also a loss business ?  Someone will profit from that but for sure it won't be the people lending at ratesetter.

I am also thinking if you had to update the government mandated "appropriateness test" for lenders because of a change in circumstances how does that affect lending.  In real terms there could be people as a result of the Corona virus who no longer meet the criteria for certain categories of investor ?  ZOPA for example make investors periodically renew their declaration.

You're wrong on just about everything you said. 
Lendy were pretty much pushed into admin by the FCA cos they were doing stuff they shouldnt have been. 

It's not quite the same as a bank run, as ratesetter don't have the money, theyre just the administrators

Ratesetter don't want to sell to metro. Metro want to buy, but ratersetter are preferring a merger. 

Why would Metro Bank buy or merge with Ratesetter other than they want the software and systems that Ratesetter uses.  Why would ratesetter be in discussions to sell or merge if their business is doing so well ?   It takes two to make a sale or merger.  I would agree Metro Bank is the most interested party.  But someone is going to make some cash if they buy it ?

I agree Lendy is a different case entirely and its portfolio of investments was mainly properties and its now under investigation regarding the management of funds etc.    I used Lendy as an example of a worse case of P2P and how people also wanted their cash out as quickly as possible.  There are many other examples where people lost faith and decided to bale out.

However 18000 - 20000 or more persons out of a total of 86920 borrowers want their cash from the Access account.  As a % of the total lenders thats 20 % approx.    I would call that a run to get cash out.  In time it may become even more given that liquidity may not increase.

The provision fund is held by RateSetter Trustee Services Limited (“RTS”), and yes it provides some good cover and is protected.
"Who does the Provision Fund belong to? The assets held in the Provision Fund are owned by RTS, which is wholly owned by RateSetter. These assets are ring-fenced from the other assets of RateSetter. The Provision Fund’s assets can be used only to reimburse RateSetter investors and to cover the operational costs of the Provision Fund (for example, third party debt collection agencies that may be used to help recover money from borrowers, and the cost of the annual audit of RTS). If the Provision Fund accumulates a surplus relative to losses, this surplus ultimately belongs to RateSetter"
How would money in the Provision Fund be treated in the scenario that RateSetter became insolvent? The money in the Provision Fund cannot be used to settle the obligations of RateSetter in the event of an insolvency of any entity in the RateSetter Group of companies. There is a security structure in place to prevent the flow of funds from RTS to RMM (unless, as stated above, there is ultimately a surplus in the Provision Fund relative to losses). RateSetter commits to ensure the Provision Fund continues to receive the allocated fees paid over the term of the loans.

Its metro that approached ratesetter, so dunno why you keep going down the "why would ratesetter do...." route.
Mergers can make sense as you then can share back office costs & various overheads which increases profitability. 

Yes loads are wanting cash out, but its not like a bank where youre entitled to it, its tied upto a long term investment so will have to wait until it either matures/monthly payments come in or someone else buys it. Its not creating a liquidity problem for ratesetter as its not their money. 

wizzards

ZeroSum said:

wizzards said:

ZeroSum said:

wizzards said:

Sailtheworld said:

ZeroSum said:

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.

No. You get your money back when the borrower makes the monthly repayments. P2P aren't meant to be like savings accounts, they're loans. 

The business model is based on Northern Rock's although, rather cleverly, there's nowhere to go and queue to get money back and the T&Cs have been worded such that if there is a run it can be turned into a slow run that might allow sufficient time for the model to recover.

It is a classic slow run. People coming up with special workarounds to extract cash, special virtual queues (which are basically made up) and bonuses being swapped for the promise of bonuses.

P2P isn't equivalent to a savings account and the higher interest rates on offer should've made this patently obvious there must be additional risk but we shouldn't kid ourselves that lots of people (most?) did see P2P as equivalent to savings. We also shouldn't kid ourselves that the senior teams at P2P aren't meeting up every morning to try and think up new ways to prevent payments out.

If people weren't trying to extract funds I'm sure everything would be OK but, no matter how irrational it is to try and extract cash, the worst place to be when that runs starts is at the back of the queue.

Exactly.   Some persons are panicking.  The same happened at Lendy.  It's just like if there is a run on the banks they run out of cash.  As an investor my view is if you can't afford to lose your cash P2P is not the right thing to invest in.  Also as a business why would ratesetter want to sell out its business to Metro Bank who is also a loss business ?  Someone will profit from that but for sure it won't be the people lending at ratesetter.

I am also thinking if you had to update the government mandated "appropriateness test" for lenders because of a change in circumstances how does that affect lending.  In real terms there could be people as a result of the Corona virus who no longer meet the criteria for certain categories of investor ?  ZOPA for example make investors periodically renew their declaration.

You're wrong on just about everything you said. 
Lendy were pretty much pushed into admin by the FCA cos they were doing stuff they shouldnt have been. 

It's not quite the same as a bank run, as ratesetter don't have the money, theyre just the administrators

Ratesetter don't want to sell to metro. Metro want to buy, but ratersetter are preferring a merger. 

Why would Metro Bank buy or merge with Ratesetter other than they want the software and systems that Ratesetter uses.  Why would ratesetter be in discussions to sell or merge if their business is doing so well ?   It takes two to make a sale or merger.  I would agree Metro Bank is the most interested party.  But someone is going to make some cash if they buy it ?

I agree Lendy is a different case entirely and its portfolio of investments was mainly properties and its now under investigation regarding the management of funds etc.    I used Lendy as an example of a worse case of P2P and how people also wanted their cash out as quickly as possible.  There are many other examples where people lost faith and decided to bale out.

However 18000 - 20000 or more persons out of a total of 86920 borrowers want their cash from the Access account.  As a % of the total lenders thats 20 % approx.    I would call that a run to get cash out.  In time it may become even more given that liquidity may not increase.

The provision fund is held by RateSetter Trustee Services Limited (“RTS”), and yes it provides some good cover and is protected.
"Who does the Provision Fund belong to? The assets held in the Provision Fund are owned by RTS, which is wholly owned by RateSetter. These assets are ring-fenced from the other assets of RateSetter. The Provision Fund’s assets can be used only to reimburse RateSetter investors and to cover the operational costs of the Provision Fund (for example, third party debt collection agencies that may be used to help recover money from borrowers, and the cost of the annual audit of RTS). If the Provision Fund accumulates a surplus relative to losses, this surplus ultimately belongs to RateSetter"
How would money in the Provision Fund be treated in the scenario that RateSetter became insolvent? The money in the Provision Fund cannot be used to settle the obligations of RateSetter in the event of an insolvency of any entity in the RateSetter Group of companies. There is a security structure in place to prevent the flow of funds from RTS to RMM (unless, as stated above, there is ultimately a surplus in the Provision Fund relative to losses). RateSetter commits to ensure the Provision Fund continues to receive the allocated fees paid over the term of the loans.

Its metro that approached ratesetter, so dunno why you keep going down the "why would ratesetter do...." route.
Mergers can make sense as you then can share back office costs & various overheads which increases profitability. 

Yes loads are wanting cash out, but its not like a bank where youre entitled to it, its tied upto a long term investment so will have to wait until it either matures/monthly payments come in or someone else buys it. Its not creating a liquidity problem for ratesetter as its not their money. 

Exactly correct.  Its the investors money so rather than stop re-lending it out from the Access account they continue to lend to new borrowers even though the provision fund is not yet sufficient.  I don't see how investors would take the statement "Its not creating a liquidity problem for ratesetter as its not their money."  But yes that's exactly the attitude Ratesetter have which is quite different from that of Zopa.

I have always seen it as a relatively long term investment but given the way its currently being managed I don't see it as a good investment.  I would have stayed if at least I could get the repayments and interest back in Access account when the loans are repaid but you can't without waiting in a 20000 + queue.

That's exactly why people including myself don't want to continue to invest. "Its creating a liquidity problem for a lot of lenders"   The product is called Access (previously rolling market) and the way it was marketed implied that it was easy to get money out.  Which it was until recently when the virus struck.   

However I don't see that two loss making businesses merging is really going to help.  Do you really think Metro bank is interested in the existing Ratesetter lenders.  Yes they are interested in the systems and the software ratesetter has developed for Loans and possibly the new & existing customers they can lend to.  It will help their business for sure. If Ratesetter and Metro Bank were profitable it would make more sense.
I can easily see a scenario where Metro Bank takes over Ratesetter, winds up the existing Peer 2 Peer part of the operation leaving the investors to wait years to get their cash back.

ZeroSum

Tbh ratesetter probably shouldnt offer an access option as it misleads folk into thinking they can use it as a savings account.

Given the time delays across the 3 options it kind of suggests that the greatest demand for money back is on the access option. Which does lead me to think that many thought that they wouldn't have issues getting it back.

Pretty much 97% of my ratesetter money is in the old 5 year option & just withdrawing as & when it's repaid, I'm in no hurry for it back 

JenniferK

In my mind Ratesetter advertised ACCESS as if it was easily accessible - otherwise why choose the name?  They used very big billboards with very small footnotes.  However that does not excuse the need to understand what one is investing in.
What does annoy me about the Access, Plus and Max accounts is that Ratesetter will not allow an option to divert interest and capital repayments into the holding account so that the investor can withdraw their own funds - they insist on loaning it out again.  Their excuse - your money will always be earning while you wait years for any RYI to be serviced.

mikb

wizzards said:

mikb said:

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 ...

Well, I'm glad you have the courage to stand by your wrong opinion, factually incorrect and libellous as it is.


I'm able to withdraw money each month from Ratesetter. The loans Ratesetter made are being repaid, with interest (albeit reduced), and that money can be withdrawn.


As to your final comment, I'll leave others to decide your status on that one.

I don't think that applies to the Access account ? 

Agreed -- I was only ever in the 3 and 5 year pyramids markets of "Classic Ratesetter" before the new products came along -- I didn't want to play the new game they were offering