If Fraud - Do I get my money back?

Hopefully the director/yatch scenario is not possible for p2p as we pay directly into the client account not the co account via our payee deposit details with a reference identifying them as ours and there are restrictions on how client funds can be taken out ie it couldn’t be emptied into the co or dir account.

Hope in vain.

We must be thankful that most people and platforms don't seem to be fraudulent because what you suggest provides no protection. These rules make clear what is and isn't allowed and what might be criminal, but a fake loan could easily be made and paid out to family members, or themselves. It could be many months or even years before a problem would be detected. One platform has lent money to a director without any suggestion of impropriety. Another platform lends money to related entities. 

+1

Yep. I would also hope payments we make go directly to a client money account and not via a company account even though fca rules allow this for a short period. It just makes sense to reduce risk for everyone where it is practical.

I would also hope all the platforms formally reconcile the client money account every working day, even though the fca minimum is longer than this. Again it reduces risk for everyone.

I am sure all platforms have strong processes in place around this. No compliance officer would want to expose themselves. I am sure platforms do all they can to minimise the risk.

Seems like quite a discrepancy to me. Thanks for pointing that out.

God knows why money passing though a small and dodgy stockbroker (if one exists) should be any safer than that going through a p2p platform or indeed any FCA authorised platform. Obviously the underlying assets shouldn't be protected but organisations allowed to take people's money and that are subject to regulation should.
I'm embarrassed to say I didn't realise that isn't the case already and I think I will make some adjustments to my portfolio.

I can't see the logic in that.  It assumes the sort of correlation that many p2p outfits are villains.  Why would you think that stockmarket is less prone to losing money?

It's largely an untested asset class. There's very limited data as to its performance under the full range of economic headwinds. Regulation is more lax than with other investment companies, so even if P2P outfits aren't villains, they can put investors at risk with the best of intentions. Not to mention their agents, such as those valuing the loan security. As discussed above, safeguards we normally expect are not present.

I don't think the stockmarket is less prone to losing money. However, over a very long historical period encompassing a multitude of economic circumstances, it can be said that with a long enough time horizon a diversified investment portfolio has always recovered from a stockmarket crash. In other words, the main risk is the sequence of returns risk, which can be mitigated through asset allocation albeit at the expense of returns - and there is a wealth of historical data to use for modelling and backtesting.

That's not to say that someone with specialist knowledge in the area couldn't cherry pick P2P investments where the rewards greatly outweigh the risks.There's plenty of evidence that some posters here are much better informed than the average punter and I'd expect them to have a larger allocation than the rule of thumb I mentioned above (which was not something I came up with myself).

bigfoot12 you're out of date .