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  • FIRST POST
    • neilsolaris
    • By neilsolaris 17th May 19, 2:20 PM
    • 177Posts
    • 19Thanks
    neilsolaris
    Funding Circle - increased bad debts?
    • #1
    • 17th May 19, 2:20 PM
    Funding Circle - increased bad debts? 17th May 19 at 2:20 PM
    Hi,

    Has anyone experienced a dramatic increase in both the frequency and amount of bad debts recently on Funding Circle? Normally I'd average about 7.5% return per year, but this last couple of months I've made a small loss, which defeats the object! Am I just unlucky, or is there a reason this has suddenly just started happening?

    Thanks.
Page 1
    • aroominyork
    • By aroominyork 17th May 19, 3:59 PM
    • 943 Posts
    • 322 Thanks
    aroominyork
    • #2
    • 17th May 19, 3:59 PM
    • #2
    • 17th May 19, 3:59 PM
    https://forums.moneysavingexpert.com/search.php Go to Keyword, put in 'funding circle', search titles only and you'll find a bunch of threads wondering much the same thing
    • neilsolaris
    • By neilsolaris 17th May 19, 4:07 PM
    • 177 Posts
    • 19 Thanks
    neilsolaris
    • #3
    • 17th May 19, 4:07 PM
    • #3
    • 17th May 19, 4:07 PM
    Thanks aroom, I'll try that, and see if I can shed any light on it.
    • Thrugelmir
    • By Thrugelmir 17th May 19, 10:14 PM
    • 63,703 Posts
    • 56,410 Thanks
    Thrugelmir
    • #4
    • 17th May 19, 10:14 PM
    • #4
    • 17th May 19, 10:14 PM
    but this last couple of months I've made a small loss, which defeats the object!
    Originally posted by neilsolaris
    Did you think that you could make 7.5% pa without any risk? The level of return is to compensate you for the risk you are taking in lending the money. What matters is the overall return achieved once you finally close the account(s). That'll determine whether it was good or not.
    “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
    • neilsolaris
    • By neilsolaris 18th May 19, 6:23 PM
    • 177 Posts
    • 19 Thanks
    neilsolaris
    • #5
    • 18th May 19, 6:23 PM
    • #5
    • 18th May 19, 6:23 PM
    I understand the concept of risk and return. My question is regarding the sudden and unexpected dramatic change in trend. If I extrapolate the current return, I can get an idea of the yearly return, which isn't looking promising!
    • Zero Sum
    • By Zero Sum 18th May 19, 7:43 PM
    • 1,017 Posts
    • 788 Thanks
    Zero Sum
    • #6
    • 18th May 19, 7:43 PM
    • #6
    • 18th May 19, 7:43 PM
    I understand the concept of risk and return. My question is regarding the sudden and unexpected dramatic change in trend. If I extrapolate the current return, I can get an idea of the yearly return, which isn't looking promising!
    Originally posted by neilsolaris
    I think also the way its account for. Once a debt becomes bad its then written off so the remainder owed becomes a loss. However a bit down the line you'll get some of it back via the recovery process which then all the payments become income. So you end up with this dip in returns which then starts to climb back a bit.
    • neilsolaris
    • By neilsolaris 18th May 19, 8:28 PM
    • 177 Posts
    • 19 Thanks
    neilsolaris
    • #7
    • 18th May 19, 8:28 PM
    • #7
    • 18th May 19, 8:28 PM
    That's how it's worked up until now zero_sum, but with much smaller bad debts, and much less frequently, some of which were recovered. Fingers crossed they recover some of the recent bad debts, so I might break even!
    Last edited by neilsolaris; 18-05-2019 at 8:50 PM.
    • Thrugelmir
    • By Thrugelmir 18th May 19, 11:54 PM
    • 63,703 Posts
    • 56,410 Thanks
    Thrugelmir
    • #8
    • 18th May 19, 11:54 PM
    • #8
    • 18th May 19, 11:54 PM
    I understand the concept of risk and return. My question is regarding the sudden and unexpected dramatic change in trend. If I extrapolate the current return, I can get an idea of the yearly return, which isn't looking promising!
    Originally posted by neilsolaris
    No different to a company that offers customers trade terms. Some years the accounts in default will be negligible. Others will be much higher. What due diligence did you perform before selecting the loans you invested in. Did you avoid loans to particular types of customer.
    “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
    • mikb
    • By mikb 19th May 19, 5:23 PM
    • 138 Posts
    • 96 Thanks
    mikb
    • #9
    • 19th May 19, 5:23 PM
    • #9
    • 19th May 19, 5:23 PM
    What due diligence did you perform before selecting the loans you invested in. Did you avoid loans to particular types of customer.
    Originally posted by Thrugelmir
    Can I assume you're not a current Fumbling Circus customer?

    In September 2017, FC took away any ability to do "due diligence" or select anything. Your options were a) invest, b) not invest.

    It went total black box, "for the benefit of investors", so everyone would be equally exposed to all the new duff loans they were writing, while inflating the size of the company (and loan book) ahead of their incredibly successful IPO ...

    In fact, those complete b******s that did due diligence, and avoided certain sectors known for gaming the system, or refusing to loan to shaky looking propositions, were making a reasonable return, while Mr Average-And-Below was sucking up all the dreck.

    FC put a very heavy handed stop to that.

    A lot of people pulled all/most of their investment in August 2017, because this was the inevitable result -- now you can't even select which loans to sell to de-risk.

    ... if you can sell them at all (currently seems to take 40+ days to sell loans, and that only gets you a fraction of them sold, try again for another 40 days).

    Poking people for not doing due diligence used to be a valid tactic, but not now.

    Sympathies to those still in this Farcical Conundrum.
    • pioruns
    • By pioruns 20th May 19, 12:08 PM
    • 98 Posts
    • 29 Thanks
    pioruns
    Three same topics about Funding Circle on the main page? Come on admins, consolidate or delete them :|
    • bowlhead99
    • By bowlhead99 20th May 19, 12:39 PM
    • 8,994 Posts
    • 16,433 Thanks
    bowlhead99
    Three same topics about Funding Circle on the main page? Come on admins, consolidate or delete them :|
    Originally posted by pioruns
    The boards are largely unmoderated. Deleting threads is not going to happen if they don't break any rules because who are we to say that other people's comments shouldn't be allowed to exist?

    Merging threads might happen if someone reports them as being on fundamentally the same topic, but simply writing on the thread that you think they should be merged is not going to catch the eye of an administrator.

    You won't get it down to one thread per service provider or product. But if you want to help new posters out, you could log on to the board very frequently yourself, and every time a new thread threatens to relate to content that's already covered by an existing discussion thread, you could search for the existing thread (s) yourself and give them the link. The community is only what its members let it be. If you don't have the time to do that, you'll have to put up with the fact that it's a free forum and nobody else really has the time to do it either.
  • archived user
    People who get loans from Funding Circle, Ratesetter et al who apply to these P2P lenders because they were turned down by banks with centuries experience of risk assessment default on their loans shocker. Next in news, Pope is catholic.
    • redmalc
    • By redmalc 20th May 19, 6:32 PM
    • 1,324 Posts
    • 492 Thanks
    redmalc
    I work in the recoveries industry and just lately I am finding a large percentage of my clients have large Funding Circle debts which is quite frightening for the lenders because these guys have no chance of paying back their debts
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