Pip - thanks for doing this - I am appalled to to be told FS seem unsure as to who owns what, allied with poor record keeping and issues regarding the source of the money to fund some of our loan investments and that is being generous and diplomatic!
Surely our investor loans are secured (well in most cases anyway) against client's assets which are NOT the property of FS are hence not liable to be subjected to creditor recovery - a bit like estate agents do not own the houses they sell?
I just hate to think what the total will be for the loans in default - I did make a possible £24m already in default plus £33m in forbearance which makes £57 out of £80m - will somebody please tell me I am wrong because that is about 70% of the entire loan book! (And not including loans already written off) so if we lose 50% of the outstanding loans that is a quick £30m or so lost - totally unbelievable!
Don't forget "organic growth - it's a process" - I hope these directors get a full time ban and that is just for starters - have deleted what I typed next as the mods may not have liked it - but you can guess!
I checked the forum and found somebody claiming he was going to make 22% on an asset about to be redeemed soon - well it was defaulted today so I guess that isn't going to happen! That said the LTV looks fairly good to me but after a fire sale and costs I think a 100% capital repayment is just about possible but a slim chance of any interest which is not going to give 22% however you cut it!
I'd have raised this with my MP by now (how bad the FCA are) but we fired them all a week ago... (the only time in my life where that has been a bad thing! ;-) )
pip - if you can share the complaint I'd be happy to paraphrase it and send my own version to the FCA. Heck, maybe everyone should just complain to the FCA - they get enough maybe they'll actually do something
As a general point Radio 4 last night broadcast "File on 4" about a widow who was clearly defrauded by a dodgy diamond valuer and a smooth talking fraudster - appalling case, However the Police weren't that interested and various forces played pass the parcel with the case. In the end their legal advice was it would be difficult to prove fraud (other lawyers disputed this). Nothing was done about the dodgy valuer and the smoothie has disappeared - bottom line - an elderly widow is conned out of her life savings and nobody has been bought to justice.
I just wonder what is going to happen to our very own dodgy art dealer and the FS directors - I know what I would like to happen to them but probably best not to say...
I am an investor in Funding Secure which was FCA regulated and went into Administration on on the 23 October 2019.
Funding Secure was a peer to peer lender which provided a facility for retail investors to invest in loans with third parties which were secured by assets. I understand that peer to peer lending has risks and I accept these.
The initial administrators report has identified key failings in the controls at Funding Secure including:
- No plan for how loans would be managed in the event of administration - Loans not being issued in line with the terms and conditions of the site. This includes loans being issued to borrowers without the investor being the clear beneficiary of the proceeds. - There have also been large scale defaults of loans issued by the site including fraud - Directors have outstanding loans from the company which have not been repaid
The administrator report identified that the weak controls were identified in October 2018.
I believe that the oversight by the FCA has failed in three key respects: 1) Ensuring the company had sufficient controls in place to protect investors when FCA authorisation was granted 2) The plan to wind down the company was according to Funding Secure's website (https://www.fundingsecure.com/risk-warnings) required by the FCA "In line with the FCA’s requirements, FSL’s wind-down policy articulates the necessary provisions in place that aim to maintain client’s best interests." As there is seemingly no plan for the wind-down of the company in the interest of investors I believe the FCA have been negligent in ensuring the wind-down plan existed or was appropriately implemented 3) The FCA should have been aware of the control failures at the company from at least October 2018, however the company was allowed to trade and take investor deposits for a year after this time.
The administrators propose that investors accept a proposal which would see investor proceeds being mixed with other creditors, removing the ring-fencing of investor funds and allowing other creditors to potentially have beneficial access to proceeds from investor loans. The proposal would also allow the administrator to deduct their fees from the proceeds of the loans. This outcome is materially bad for investors and means that the ring-fencing of client funds is for peer to peer lenders, in practice worthless.
Brief details of the steps you have taken so far to try and resolve the matter (including any compensation received to date):
None - the company is in administration and the proposals from the administrators are not in investors interests. There is no other party to offer a better outcome to investors.
1) Authorisation of Funding Secure without proper assessment of the companies controls 2) Failure to ensure that Funding Secure had an appropriate wind-down plan in the event of the platforms failure 3) Failure to take appropriate action when it was clear in October 2018 that there were inappropriate controls in place
1) The FCA to take ownership to implement a wind-down process of the loan book in the interest of investors 2) The FCA to refund investors for losses which could reasonably have been avoided had the controls at Funding Secure been reasonable
The Financial Services Compensation Scheme (FSCS) seeks to protect the cash held in your FundingSecure Limited (‘FSL’) client money account (up to a maximum amount of £85,000), however, the investments (property loans or pledged asset loans) that you make through our platform are not protected by the FSCS.
If that is not true then why on earth did the FCA allow them to say that on their website.