Kuflink P2P - changing Ts & Cs

cfw1994

Anyone else here receive their new terms & conditions?

Key points include them NOT using their own capital to cover any losses, & also something about them not taking on the first 5% of loans 🧐

Sounded to me like nothing positive for an investor, & as a consequence, we will be withdrawing our funds (not a significant sum, it has to be said!). 

Indeed, it read as a business that might be struggling, making such bold and disadvantageous (to customers) changes 😔

A shame really - they have been very solid for quite some time - no investor losses, AFAIK - & having cashed in the NS&I bonds after their feeble new offer, I had actually considered putting more into them.

Hey ho 🤷‍♂️

masonic

Plenty of discussion of this here: https://p2pindependentforum.com/thread/21248/kuflinks-shared-risk?page=2 (scroll a few posts down).

cfw1994

Blimey - 7 pages of it there!
I had searched here - am not on that forum.
Quick skim suggests most (well, most of the first few I’ve read) agree that it is time to bail on them.   Unless you want to summarise it otherwise?

Things move on, eh.

dantep

I've been getting concerned over the past month or so, as select loans sit there for week after week, funded but not going live. No new deals have been offered for a while, and the Auto Invest has no availability.

None of this seems to auger well, so the new T&Cs are the last nail in the coffin for me. Unfortunately I'm fairly new on the platform, so I can't bail any time soon, but I've just unreserved the last of my selects and I won't be adding any more.

janesmith

cfw1994 said:

Anyone else here receive their new terms & conditions?

Key points include them NOT using their own capital to cover any losses, & also something about them not taking on the first 5% of loans 🧐

Sounded to me like nothing positive for an investor, & as a consequence, we will be withdrawing our funds (not a significant sum, it has to be said!). 

Indeed, it read as a business that might be struggling, making such bold and disadvantageous (to customers) changes 😔

A shame really - they have been very solid for quite some time - no investor losses, AFAIK - & having cashed in the NS&I bonds after their feeble new offer, I had actually considered putting more into them.

Hey ho 🤷‍♂️

I find myself standing on the same sinking ship called HMS Kuflink as you I'm afraid.

I placed my family’s life savings across different fixed period Auto‑Invest schemes with Kuflink. I did so on the basis of receiving guaranteed interest returns after the multi-year period had ended, just like one gets with a bank savings bond.

As you state, Kuflink has suddenly enacted a series of abrupt, investor‑damaging T&C changes that have, for instance, effectively imprisoned nearly half of my funds in loans that are non-performing, in eternal default and highly toxic.

Kuflink have enacted these changes to apply RETROSPECTIVELY!

I am incredibly concerned for my Kuflink investments because all the signs point to a deliberate wind‑down of Kuflink's business, kicking retail lenders to the curb.

When one of my Auto‑Invest investments matured a few days ago, Kuflink paid only about 55% of the capital and interest owed!

Endless requests for explanation and resolution have gone unanswered.

The departure of the previous Kuflink management, including around 25 other staff, and replacement with a new team has resulted in a new set-up at Kuflink. The new workers at Kuflink are highly disdainful of investors and uninterested in protecting lenders’ interests.

In the last few weeks, different industry experts in British peer‑to‑peer investing have openly expressed astonishment at Kuflink’s sudden change of T&Cs and how they are treating their investors.

I join the many online reviewers on the P2P Independent Forum, which somebody has linked to above, on TrustPilot and elsewhere who are appalled by the cumulative effect of recent policy changes on ordinary lenders.

As Kuflink are determined to take advantage of their retail lender base and throw their rights out of the window, and they do not bother to reply to e-mails and the like, I will be commencing legal proceedings to recover what is owed to my family and I.

Prospective investors should avoid Kuflink like COVID-19, as they will be severely let down.

Time to "bail out" as cfw1994 wisely states above!

masonic

janesmith said:

I placed my family’s life savings across different fixed period Auto‑Invest schemes with Kuflink. I did so on the basis of receiving guaranteed interest returns after the multi-year period had ended, just like one gets with a bank savings bond.

Even after agreeing to the risk warnings stating "Don't invest unless you're prepared to lose money. This is high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong" and completing a questionnaire where you had to agree that investing in Kuflink is not the same as having a savings account? There were no guaranteed returns and Kuflink clearly stated that.

What would you have done in a 100% loss scenario?

Alexland

Wishing anyone invested with Kuflink the best outcome but for me the risk was too high for only a 10% return. I tried them for a year on a cashback deal giving around 20% return but withdrew my money once it was over.

IF ISAs always seemed flawed as a consumer product misleading retail investors to think they will get the stability of cash but only until the sudden upto 100% loss event occurs.

There are good investment trusts for asset backed lending that offer similar return, better diversification, liquidity and also have a no-default history such as TFIF which can be held in a S&S ISA.

janesmith

Thanks for the feedback.

Agree that investment trusts etc. are a much safer and wiser investment and that's what I will be doing in the future, if I can ever get my money back from the rats that are Kuflink.

The critical point is that Kuflink changed their T&C's retrospectively. It's like a bank promising you 5% a year for putting your money in a one year bond with them and then, after the one year, telling you that you are only going to get 2.6% interest and they are only going to give you 55% of your principle back. 

The entire UK peer-to-peer industry is in outrage over what Kuflink have done and think it's unfair.

See, for example, the comments from their lenders / victims on the P2P Independent Forum or on TrustPilot.

Yes, I was a complete and utter numpty for trusting them and, believe me, I beat myself up about it every single day. But the fact that they have suddenly changed their T&Cs retrospectively is beyond appalling and in contravention of FCA guidelines of institutions having to treat their customers fairly. A regulated financial institution can't just change the rate they are going to pay their customers or how much money of their money they will return to them retrospectively.

masonic

janesmith said:
The critical point is that Kuflink changed their T&C's retrospectively. It's like a bank promising you 5% a year for putting your money in a one year bond with them and then, after the one year, telling you that you are only going to get 2.6% interest and they are only going to give you 55% of your principle back. 

The changes took effect on 25/09/2025 and prior to that the old terms apply. Investors were given 15 days to either agree to the new terms or reject them.

Loans executed prior to the date of the change will continue to have the up to 5% stake from Kuflink on a first loss basis. The covering of investor losses using the discretionary fund was always optional and could never be relied on, but none of that money (if it was used prior to 25/09/2025) will need to be repaid by investors. The 0.25% deduction from successfully collected default interest will only apply for collections after 25/09/2025.

Nobody should ever have expected Kuflink to cover their losses and the clause would have been a problem for the FCA, who has pushed back on firms putting their own capital at risk as it weakens their resilience and increases the likelihood of total failure. To the writing has been on the wall for that clause for years. Nevertheless, it will only apply to unrecoverable losses incurred after 25/09/2025, not retrospectively.

Investors had the option to reject the changes, and either run their account down (the option I selected having just a small sum left in defaulted loans), or liquidate under the T&Cs for the specified fee. If you had chosen the latter, then there might be room for negotiation on the fee under the circumstances.

Which option did you choose?

janesmith said:

Yes, I was a complete and utter numpty for trusting them and, believe me, I beat myself up about it every single day. But the fact that they have suddenly changed their T&Cs retrospectively is beyond appalling and in contravention of FCA guidelines of institutions having to treat their customers fairly. A regulated financial institution can't just change the rate they are going to pay their customers or how much money of their money they will return to them retrospectively.

There is a strong possibility that this change was required by the FCA. Once again, in P2P the returns were never guaranteed, the change to the T&Cs does not change the rate of your existing loans, or new ones, it removes a discretionary provision fund that Kuflink could have declined to use to meet your losses even prior to the changes, but this will only apply to losses after the date of the change.

The changes have really only moved the needle very slightly, if at all, in terms of risk. Any losses that would otherwise have been covered by the first loss and provision fund would have been recovered through an adjustment to the interest rate anyway, so the overall effect of the change is to make it clearer to investors that ultimately they must bear the costs of defaults by having them cover them more explicitly.

janesmith said:

Agree that investment trusts etc. are a much safer and wiser investment and that's what I will be doing in the future, if I can ever get my money back from the rats that are Kuflink.

It's important to understand that with the investment trusts you are now considering investing in, there will be no guaranteed returns, and any losses will be borne by investors. You will also see the value of your investment fall even if market sentiment worsens without any actual losses.

Investment involves risk, and none of these products are comparable to savings accounts.

Albermarle

The entire UK peer-to-peer industry is in outrage over what Kuflink have done and think it's unfair.

I think P2P participants have been in outrage and severe disappointment many times over the last few years about the behaviour of many P2P platforms.
Lendy, Collateral etc 

Eyeful

janesmith

Out of interest why did you feel the need to invest in Kuflink, instead of investing in something like the 

1.SPDR S&P Global Dividend Aristocrats UCITS ETF if you wanted dividends
2. Or a simple world index tracker fund like HSBC MSCI World UCITS (GBP)