Kuflink P2P - changing Ts & Cs

janesmith

Masonic - as you know, accepting or rejecting the new terms has no bearing whatsoever on the return of one's capital at the point of maturity of the Fixed Term timeframe. One can try to make excuses for situation however one likes, but the fact is that I have only received around 55% of my capital and accrued interest on the due date whereas I was sold these schemes by Kuflink on the basic I would get all of it back on maturity. On the maturity of the identical Auto Invest schemes before these new changes were introduced, I and other investors would receive 100% of their capital and due interest.

Kuflink's loan book is a catastrophic state and it is highly likely that I and others lenders will not get a substantial ratio of our remaining 45% capital or interest back. Based on how long Kuflink's loans-in-default typically drag on for, even to get bits and bats of our remaining capital will certainly drag on for years and years.

Eyeful - you are right, I should have invested in the stock-market in a diversified fund. Believe me, I kick myself about it every day. I foolishly drank the kool aid about P-2-P in this country being a fairly reliable, highly regulated form of investing, with all the loans the platforms made being very diligently assessed and being asset-backed blah blah blah. Now I'm paying the price.

janesmith

Albermarle said:

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 

You're right. It's happened way too many times.

My advice to anybody would be to not go anywhere near Kuflink, or their brethren like Crowdproperty. They are complete rascals and have no consideration whatsoever for their poor investors. Don't be an wally like I was.

Read how much money their investors have lost and how much they have suffered on TrustPilot etc.

masonic

janesmith said:

Masonic - as you know, accepting or rejecting the new terms has no bearing whatsoever on the return of one's capital at the point of maturity of the Fixed Term timeframe. One can try to make excuses for situation however one likes, but the fact is that I have only received around 55% of my capital and accrued interest on the due date whereas I was sold these schemes by Kuflink on the basic I would get all of it back on maturity. On the maturity of the identical Auto Invest schemes before these new changes were introduced, I and other investors would receive 100% of their capital and due interest.

Kuflink's loan book is a catastrophic state and it is highly likely that I and others lenders will not get a substantial ratio of our remaining 45% capital or interest back. Based on how long Kuflink's loans-in-default typically drag on for, even to get bits and bats of our remaining capital will certainly drag on for years and years.

Eyeful - you are right, I should have invested in the stock-market in a diversified fund. Believe me, I kick myself about it every day. I foolishly drank the kool aid about P-2-P in this country being a fairly reliable, highly regulated form of investing, with all the loans the platforms made being very diligently assessed and being asset-backed blah blah blah. Now I'm paying the price.

Yes, I agree that accepting or rejecting the new terms will likely have no bearing on your final outcome, unless you exercise the option to liquidate (for a fee). But I'd go further than that: the changes to the T&C themselves will likely have no bearing on your final outcome. What you have to understand is that it was always discretionary for Kuflink to repurchase non-performing loans and cover losses. This is a convenience they'd only ever be able to do during the good times when it didn't matter. The change to the T&C is a red herring when it comes to investor outcomes.

Up to 2024, I don't think there were any losses to be covered. However, in 2024/25, Kuflink, at its discretion, covered £315k of losses. To put that in perspective, its profit for the 2024 calendar year was £461k. In an analysis in the P2P Indie forum just after April 2024, the Autoinvest pool was estimated to contain around £20m in defaulted loans overall. That also coincided with a 30% drop in assets under management, meaning a lot of investments had to be repaid.

If you do the maths, 30% of £20m is an unaffordable sum for the platform to cover, so whether or not the T&Cs were changed, Kuflink would have no choice but to exercise its discretion and not use its own funds to cover borrower defaults. And the FCA would not allow any regulated firm, even in the "light touch" regulation of P2P, to expose themselves to such an existential risk.

I note that this level of defaults is proportionally higher than the total Kuflink loan book, because that contains both Autoinvest and Select Invest loan parts. It seems on the whole, those that chose their own loans to invest will be faring somewhat better, which is perhaps not surprising. I only ever used Select Invest, and my default rate is 1.8% by value (2 loans out of 39, with one almost fully repaying). I only used Kuflink in brief spells, one between 2018-2019 and another during 2022. Defaults started picking up in 2023, so I didn't go back for another bite of the cherry.

It's a very common pattern for young platforms to have a clean record over their first few years, then start carrying an increasing level of defaults as their loan book matures. It can take up to 5 years of forbearance and enforcement efforts for a delinquent loan to reach a final outcome. To Kuflink's credit, it did a better job here than most, and its loan book is certainly not in a catastrophic state. Nowhere near the state of those infamous platforms of the past mentioned upthread. Ultimately, the outcome for investors rests on the ability of the borrowers to repay. P2P, by its very nature is subprime, and more than that, borrowers would only resort to such an arrangement if no mainstream lender will touch them.

So losses are a fundamental part of P2P investing. Which is why you are made to jump through hoops by the FCA (proving you understand the risks - at least in theory) even to be allowed to invest. Even with the current challenges, I doubt anyone will see the level of losses at Kuflink that have been visited upon many of us who invested in the earlier platforms.

squiz18

I've only just caught up with this story. 

I logged onto my Kuflink and stated I didn't agree to their new terms and wished to close my investments once they mature. 

I have around £1400 invested with them so not too much in the scheme of things. 

Most mature next August so a while off. Presumably there is nothing I can do with those ones. 

I have one expiring on the 27th of November though, these are the figures: 

Amount Live

£75.05

Repaid Amount

£5.38

Default Amount

£40.59

Pending Amount

£13.22

Original Capital

£136.55

I'll choose for this one to be repaid. What can I realistically expect to get back? 

masonic

Outcomes are very difficult to predict, but you could check the updates to understand more about the remaining live amount.

michael1234

masonic said:

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?

Your thoughts are right but given the situation of the poster perhaps you could express them with some compassion.

michael1234

Albermarle said:

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 

FundingSecure, Moneything and many many others.

masonic

michael1234 said:

masonic said:

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?

Your thoughts are right but given the situation of the poster perhaps you could express them with some compassion.

Unfortunately that approach often does not work. I'm reminded of a similar case a couple of years ago where a poster was investing in unregulated mini-bonds and continued doing so even after the first one went bust with no prospect of a return to investors and popped up in another couple of threads having been caught out again.

The poster is lucky in this case and probably won't come out of it too bad, but it would be remiss of me not to drive the point home so that hopefully in the future this serious misunderstanding of the risks won't be repeated. Next time it could be a lot worse.