Peer-to-peer lending sites: MSE guide discussion

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  • economic wrote: »
    I have withdrawn nearly everything from FC.
    I have 1k in lendy which will probably take years to recover.
    I am selling down assetz, still someway to go.
    LW and RS i will just withdraw repayments as selling prematurely incurs a fee and these two platforms seem to be decent anyway so dont mind it being slow.
    ABL rate i will let mature as i like the risk/return.
    Collat and MT i have tiny amounts left, just waiting to get back.

    I was able to sell out of Assetz in reasonable time, 2k though. Ratsetter been withdrawning replayments to Lending Works with rate lower in RS.

    Leading to today, my concern was these large property developments as so many go unfinished and can easily hit trouble as has been happening.

    Albrate I agree, I like the rosk / reward - I hope they can continue this way. MT I was getting uneasy about, I have about £750 in defaults now, couple might come through, who knows so this will take time to see. I was getting uneasy with Collateral and their property route and loans not filling and them admitting they needed to change direction from the large property loans.

    Anything I am getting out will go to stocks at the moment as we see how this all unfolds.
  • Relevant part of collateral t&c
    In particular you should note that if Collateral was to become insolvent then any money held by it would not be held in accordance with the FCA’s client money rules, which require in particular that client money is held separately from a firm’s own money, and it is likely you would rank as an ordinary unsecured creditor. Ordinary unsecured creditors rarely make any recovery on insolvency.

    That would presumably only refer to cash in accounts though, and possibly loans that were not drawn down? I am not sure about that part.

    I did hold a small amount of cash and a few unfilled loans.
  • economic
    economic Posts: 3,002 Forumite
    Seems like my warnings from a few weeks back were well timed. I have a gut feeling this is the start of the end for P2P. Dont forget the one canary in the mine is that when you get a mass exodus away from P2P, this increases chances of platform failures across the board, by a LOT.
  • Sadly collateral's t&c is saying they can help themselves to client accounts in the case of insolvency and they are not following the usual FCA rules.

    They didn't have full FCA authorisation.

    I have a lot in collateral and hoping everything is ok. Can copy the relevant quotes from p2p forum in a sec

    Just read that too. I hope everything is ok too, I have £4600 odd in Collateral so enough to get burnt with. .

    There has been some large amounts invested in single loans there by people, I won't like losing my money like anyone would, theres worse in life that can happen and it can be recovered from with a harsh lesson. If they are still in business it will cause them damage I am sure with no update.
  • economic
    economic Posts: 3,002 Forumite
    Relevant part of collateral t&c



    That would presumably only refer to cash in accounts though, and possibly loans that were not drawn down? I am not sure about that part.

    I did hold a small amount of cash and a few unfilled loans.

    Interesting. I had only one loan that was due to be paid back end of this month. I wonder if this would be classed as cash or a loan if Col did go bust and for me to claim my money back.
  • economic wrote: »
    Seems like my warnings from a few weeks back were well timed. I have a gut feeling this is the start of the end for P2P. Dont forget the one canary in the mine is that when you get a mass exodus away from P2P, this increases chances of platform failures across the board, by a LOT.

    You made valid points for sure, I may of not fully took all of them on board I admit, but they did make me think and question a few things with my investments. If Collateral goes under, It won't help the industry thats for sure.
  • economic
    economic Posts: 3,002 Forumite
    Just read that too. I hope everything is ok too, I have £4600 odd in Collateral so enough to get burnt with. .

    There has been some large amounts invested in single loans there by people, I won't like losing my money like anyone would, theres worse in life that can happen and it can be recovered from with a harsh lesson. If they are still in business it will cause them damage I am sure with no update.

    If they are still in business, they will need a VERY good explanation in order to prevent people withdrawing money out.

    If they are really bust, then you will never hear from them again and only the administers.
  • Relevant part of collateral t&c



    That would presumably only refer to cash in accounts though, and possibly loans that were not drawn down? I am not sure about that part.

    I did hold a small amount of cash and a few unfilled loans.
    I believe you are correct.

    The rest of it should come under this

    Operators of electronic systems in relation to lending: arrangements to administer loans in the event of platform failure

    SYSC 4.1.8A R 01/04/2014
    An operator of an electronic system in relation to lending must take reasonable steps to ensure that arrangements are in place to ensure that P2P agreements facilitated by it will continue to be managed and administered, in accordance with the contract terms, if at any time it ceases to carry on the activity of operating an electronic system in relation to lending.



    SYSC 4.1.8B R 01/04/2014
    Any arrangements made under SYSC 4.1.8A R must be notified to lenders under P2P agreements:
    1. (1) when such arrangements are made; or
    2. (2) if later, when the lender first becomes a lender under a P2P agreement with that operator; or
    3. (3) if the arrangements are changed, when that change is made; and
    4. (4) if the arrangement involves another firm taking over the management and administration of P2P agreements if the operator ceases to operate the electronic system in relation to lending, the notification to lenders must inform lenders of the identity of the firm with which the arrangements have been made and how that firm will hold the lenders' money.



    https://www.handbook.fca.org.uk/handbook/SYSC/4/1.html

    At least I hope it does.
  • economic wrote: »
    If they are still in business, they will need a VERY good explanation in order to prevent people withdrawing money out.

    If they are really bust, then you will never hear from them again and only the administers.

    They certainly will need a very good explanation if they are still in business, I think their trust could be broken here if they are still around. I don't think I would want to invest when it was their high level of communication that gained peoples trust and business to this level.

    If nothing tomorrow, it's not looking good.
  • economic
    economic Posts: 3,002 Forumite
    They certainly will need a very good explanation if they are still in business, I think their trust could be broken here if they are still around. I don't think I would want to invest when it was their high level of communication that gained peoples trust and business to this level.

    If nothing tomorrow, it's not looking good.

    Yeh. The fact that the site says they are upgrading servers gives me some hope. But the fact they have been so good before and now they seem to ignore people who called in is very worrying.

    So i am not sure if all this is just scaremongering or if it is genuinely something to worry about. 50-50 at this stage.
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