Which platforms have you left and why?

Natural wind down of Bondora (1001+ reasons of why) and Omaraha (lack of communication with investors, strange approach to investors) portfolio.

I'm doing an unnatural wind down of Bondora (for probably the same reasons).

AC had some battering here but for me they are one of the best as they have full credit reports, full valuations, continued updates, set a limit to buy in secondary market so all done automatically. I only lend against Resi property and lowish level commercial, far safer if anything goes wrong than others, appreciate this works if you have some idea of what you are doing (eg i am ex business bank manager - Boo!


Further to the quote above, I do not believe AC are one of the best by any means, as they have a considerable amount of default loans, a number of which I am in and the valuations are proving to be seriously incorrect and there is even one loan where AC did not even secure the legal charge lenders should have had on one of the properties. They don't like controversial (factually correct) questions being put on their website and often remove such questions. Their secondary market is good but I notice their LTVs on many loans are still very high and lenders must bear in mind they are based on market values not forced sales (the potential realisations we are seeing on some of the problem loans are considerably lower than even forced sale values, which is most worrying) AC also push lenders to vote on limited options and do not give lenders the real chance of deciding what course of action they prefer. Infact on some of the default loans (where incorrect information has been given and/or the promised security has not been obtained) lenders should not be in the position AC have put them in.

We are now investing in other platforms where the security seems much safer with much lower LTVs and generally more open for lenders to comment.

I think it is important to differentiate between the management processes at AC which are a little disorganised and the actual investments offered.  The investments often come with a good range of detail that allow you to make a sensible selection and the cash chasing processes seem ok.

What you cannot afford to do it to take AC loans as equally safe and just dropping by to invest without reading is unwise, which is why I do not want to invest in many of their managed accounts.  To me, they seem to be lumping assets together with diverging risk characteristics. 

At the start of 2016 I expected to start leaving AC but find myself with a growing loan book there despite my concerns, so they must be doing something right.

FC, on the other hand, are just taking the p@s.  I don't know if they use automated risk management in the UK (I know they do in the US) but the rates they offer, appear to me, to be biased to the house.  I suspect they should cut their investor fees of 1% to 0.25% in order to gain my "interest".  Hence my steady departure.

In the spirit of invaluable feedback: AC is by far my largest P2P holding (& I am soon to be a shareholder); AH & his team struck me as competent, intelligent & professional with a vision for the future that allied with my own. They provide full credit reports/valuations so investors can judge the facts/security/proposal etc for themselves & have impressive IT & website infrastructure, however, they seem to have decided to move away from high risk/return investors to tap the more plentiful supply of lower risk/return investor demand, partly to address a drought of new loans from Spring 2015 – early 2016, by introducing provision fund protected accounts & an across the board drop in rates designed to attract lower rate better quality borrowers, whether they have achieved the latter yet is questionable IMO. The standard play book reads build the platform with lenders who want high risks/returns & as demand grows develop the IT systems to cope with larger volume then as demand outstrips supply introduce ever more complicated credit scoring models & IT improvements that can be used to justify why investors need to accept lower returns for better quality loans & finally end up with a black box model that offers fixed (much lower) returns, with a provision fund attached. I can completely accept this strategy but risk needs to balance with reward, not just reflect market supply & demand; they once prided themselves on pricing for risk not liquidity but unless you claim the risk element is artificially well below the headline rate, that most investors judge the risk by, that ideal appears to have fallen by the wayside.

This cautious attitude was built into the new automated trading system where loans are suspended on a credit event & investors can only reset targets after acknowledging the latest information, which is the correct procedure to protect investors. Yet with a woeful record in ongoing loan management, even the very basic monthly touching base phone call or quarterly site visit either doesn’t happen or result in any proactive solutions for potentially distressed loans. They also very easily get tied up in legals/compliance/red tape to the point of weeks & months of inaction, often when swift & decisive decision making would benefit all concerned (lender/borrower & AC); This lengthy period of uncertainty often pushes the borrower deeper into trouble & simply destroys any liquidity that the loan once had, so if & when it ever does become tradable investors are forced to take a financial penalty/discount to secure an exit. Examples include: #45 miscalculated buffer, refused borrower payments then destroyed the SM liquidity with long periods of suspension #182 – Main guy was off sick for 6 months but was only discovered when pointed out by an investor, #84 had no PP lodged & ceased paying but investors requests for an LPA vote took 9 months to be granted, full recovery expected but still suspended #79 took 9 months to address cashflow/payment difficulties, even when the potential solutions were suggested at the time.

Whilst I understand having to revise strategy to be able to compete in an increasingly competitive market for borrowers & to satisfy the increasing demand of investors for loan opportunities I have no sympathy for inadequate monitoring or lengthy delays in taking appropriate actions because whilst compliance, IT, legals, correct procedure is all very important it is meaningless if the core business is unable to function under the pressure. Nothing can take precedence over the sourcing, issuing, monitoring & enforcing of loans & it shouldn’t require repeated personal interventions from andrewholgate to establish that fact. Whilst the AC theory is strong the practise is far too often weak & appears to lack any business empathy or understanding of the concept time is money; choosing dither & delay over decision & action too frequently.

Is AC the worst P2P platform out there, not by a long shot but is it the best? Potentially but only if it seriously addresses these issues for the long term health of the platform. Those of us who want & believed it could & would become the best are just frustrated by relatively basic yet frequent errors.

In response to Chris - you may see such feedback as invaluable however your MD quite rightly pointed out that if you do things wrong, it should not be taken as negative feedback, it's feedback you need to improve on. You would of course say the things you have from your point of view, I am talking from an independent lender's point of view and do not believe what I have said contains errors. The third party professional valuations come with caveats, recommendations etc many of which AC should action on behalf of lenders, irrespective of whether they are based on MV and/or otherwise. Your presumption on the loan with lack of the actual security lenders were promised is correct. The Credit Report stated "We will also have a 1st legal charge on one of the shops ..". This legal charge was not obtained. Please provide lenders with evidence if it was and I will stand corrected. As you say, there are other routes to try and obtain repayment (although we understand one of those is also now in dispute), so let's hope your prediction is correct. AC have deleted the questions and it has already been taken up with the directors/managers accordingly. I note you admit failure in other areas, but of course they are not so critical as ensuring the security on loans is as strong as lenders understood it would be.