Do P2P companies make any guarantees at all?

Ken661 · 6 July 2018 at 9:51AM

My story starts by reading a disclaimer on one of my P2P companies' web sites to the effect that they did not guarantee either (a) access to their web site or (b) the accuracy of any information on the web site. This made me wonder what I would do if I needed the information when (i) the web site was down or (ii) the web site was up but contained incorrect information. This lead to the broader question as to what guarantees of any sort the company did in fact offer.

I contacted the Financial Ombudsman's Service about whether or not it was reasonable for a company not to guarantee e.g. they would keep accurate records and make them available to me on request. I was told that FOS could only act if the company had violated the contract I had made with them. I suspect that this is not actually true but nevertheless it begs the question "What contract did I make with them?".

Not having this information to hand, I contacted two of my P2P companies and asked for a copy of my contract. Despite repeated requests and clarification of what I was asking for, neither of them have yet given me anything that could be called a "contract".

I am beginning to suspect that no contract exists. If true, then what recourse would I have if it turned out that the £1000 I had given a company to invest had actually been spent on something other than an investment on my behalf?

I'm aware that in some circumstances one can take action against a company when there is no contract because action can be taken on the basis of what a contract might "reasonably" be assumed to have contained if it had existed. (I think this is the sense in which the FOS was incorrect.)

Any thoughts, opinions and facts gratefully received,

JohnRo · 6 July 2018 at 10:21AM

I don't know which companies you're referring to but personally I think the P2P landscape in general has the makings of a train wreck.

I have very limited exposure to P2P bridging loans as a toe in the water exercise and intend to keep it that way.

I don't expect to see anything like the enticing headline returns being offered either, at the final count. Hope to be pleasantly surprised.

firestone · 6 July 2018 at 11:30AM

would think in general that most companies not only P2P would have the disclaimer about web site access and accuracy of info on the site(would hope they mean info & not your account figures) as this would cover them for any problems with the site.Maybe somebody who has gone through the TSB problems of late knows if that idea of access to the site come up?
As for a contract is this not the same thing as accepting the terms & conditions which can be found on any site but if as you say your £1000 was spent on something other then an investment on your behalf then that would be fraud surely.

masonic · 6 July 2018 at 11:52AM

Ken661 wrote: »

I contacted the Financial Ombudsman's Service about whether or not it was reasonable for a company not to guarantee e.g. they would keep accurate records and make them available to me on request. I was told that FOS could only act if the company had violated the contract I had made with them. I suspect that this is not actually true but nevertheless it begs the question "What contract did I make with them?".

In the case of FCA authorised platforms, financial promotions are subject to regulatory protections, particularly that they are clear and not misleading. For the avoidance of doubt, all regulatory protections are taken to form part of your contract with any authorised firm.

It has been discussed at length the extent to which information would need to be incorrect and/or misleading in order to trigger a valid compensation claim. It has so far been untested, but there are numerous examples in which investors might be pursuing complaints against certain platforms right now.

Of course, in the world of P2P, any FOS ruling is only as good as the firm's means to pay it. There is no FSCS protection to fall back on.

dunstonh · 6 July 2018 at 11:53AM

A lot of data on sites is third party. So, they cannot guarantee the accuracy. They also cannot guarantee access as many things are outside of their control.

it is unlikely a physical contract exists (i.e. piece of paper). However, a contract will exist the minute you use their services. They should be able to supply their T&C as that the basis of the contract.

Ken661 · 6 July 2018 at 1:57PM

Thanks for your feedback everyone. I deliberately did not name the companies involved because I didn't want to get sued, especially when there is to extant contract! However, they are both well-known UK brands.

For the record, Company #1 is now saying

"In regards to the T&Cs you have read, these are concerning to the information that is provided on the main website, this does not include the information that is given to you in regards to your personal Members Page. All the information on your personal members regarding both your investment accounts, will be accurate and precise. "

I certainly don't like being sent poorly-worded, ungrammatical messages from a representative of any company, let alone a company providing financial services, but I guess to someone on the Clapham omnibus the statement is clear enough (I would not like to test this in a court though).

Company #2 coughed up a link to a document that looks pretty legal after I had emailed them five times.

Pobby · 6 July 2018 at 3:52PM

JohnRo wrote: »

I don't know which companies you're referring to but personally I think the P2P landscape in general has the makings of a train wreck.

I would be very interested in why you think that peer to peer lending is heading for a fall?

dunstonh · 6 July 2018 at 4:01PM

P2P is not properly regulated yet and has been referred to as the Wild West.

You need to be on your guard and we know from the regular posts from people going into weird schemes that quite a lot are not on their guard.

Once the FCA gets regulation sorted it will be better. However, the FCA has a habit of regulating after the horse has bolted.

fred246 · 6 July 2018 at 8:47PM

At one stage I was going to spread a small fraction of my portfolio between the major P2P players. I then decided that although my funds can go up and down in value they would never go to zero. I decided that P2P companies had the potential to lose your whole investment so in the end I decided against any P2P investments.

Do P2P companies make any guarantees at all?

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