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Post by ablrate on Jul 22, 2014 6:39:03 GMT
I had no problems registering with site but not as a verified user as at the moment I lack the required documentation. Not a problem as the lack of loans would not encourage me to invest currently. However, I am puzzled by the need to provide the requested documents. I am a lender on several platforms, Z, FC, RS, FK, AS, Well, SS and I have absolutely no recollection of any of them requiring passport or driving licence in order to lend. Perhaps its a change following FCA regulation but I have joined at least one of those platforms since that came in to being. Address verification via electoral role and a verified bank account were required in most instance but no more. A quick look at the T&C on 2 leading sites states that they will carry out checks using credit references agencies & other means and would only require personal documentation in theevent this proved unsuccesful. Hi il moro Thanks you for your feedback. This comment and others is prompting us to clarify with the FCA what they will accept. Our advice has been quite clear, that we need to check ID and address. I have quoted the FCA view on this previously, and here is another section specifically dealing with anti-money laundering checks: It is pretty clear, but if other platforms have a different interpretation and are compliant with FCA rules, then we will take a look at taking out passport or DL check.
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smee
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Post by smee on Jul 22, 2014 6:43:43 GMT
It is always difficult to assess a new platform. Investors are naturally wary of committing funds, but it is clear from this forum that loans from some other platforms are eagerly awaited.
They obviously have to have acceptable risks and interest rates but, speaking personally, I like to know I can have quick access to funds if needed. I am no longer investing for my old age because unfortunately I am already there. I am a fan of SS because of its simplicity and short term loans, which are snapped up on the secondary market. AC too is popular, and although I have not been investing with them long, I understand that they once had a secondary market charge which they decided to remove.
I am looking forward to see what Ablrate has to offer but I would have liked a loan with a shorter term initially since I don't know how popular your secondary market will prove to be and a 1% charge is putting me off too. I see there is an auction element and personally I would prefer simplicity. I gave up the idea of TC because it was too complicated.
I don't know how others feel - these are just my ramblings. As others have said, I appreciate your contribution to this forum, and to the way you have responded to comments (and criticisms) here.
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james
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Post by james on Jul 22, 2014 8:14:05 GMT
Those are, sort of but I think not quite correct, the base money laundering identification requirements but you are permitted to use alternative measures where that is appropriate for the risk level or where the person concerned can't fulfil the standard requirements because they lack the required documents. At the lowest level of reliability that can even include nothing more than an attestation from a person who knows the applicant. You appear to have at least some familiarity with the guidance of the Joint Money Laundering Steering Group but maybe not all of it. The three documents that are of most relevance are the amended versions of their original 2007 guidance, with the first providing the core material. One of the JMLSG requirements is that you do have a process to deal with those who can't produce the standard evidence, page 52. Also: " 5.3.27 Evidence of identity can take a number of forms. In respect of individuals, much weight is placed on so-called ‘identity documents’, such as passports and photocard driving licences, and these are often the easiest way of being reasonably satisfied as to someone’s identity. It is, however, possible to be reasonably satisfied as to a customer’s identity based on other forms of confirmation, including, in appropriate circumstances, written assurances from persons or organisations that have dealt with the customer for some time." page 61 "5.3.29 Evidence of identity can be in documentary or electronic form. An appropriate record of the steps taken, and copies of, or references to, the evidence obtained, to identify the customer must be kept." The sections following that contain the rest of the key rules that you need to know about, with more in 5.3.68 for private individuals on page 68 and later. I'm a little puzzled why you don't think that you need all of full name, residential address and date of birth, since those are the three core consumer identification pieces of information that normally need to be collected and verified in some way. If you're using documents, not electronic verification, then the normal money laundering rules require either: a government issued document with photograph and either residential address or date of birth or a government issued document without photograph with the full name, a list of some but not all is given. like driving license without photo or evidence of receiving a state or local authority funded benefit, supported by a second document from a broad range of sources that are given on pages 69 and 70. Council tax statement, bank statement, credit/debit card statement or utility bill are included in this second document list. Those must have been sent through the post to confirm the address. But all of that is relatively clumsy compared to using electronic verification as described at 5.3.79 via one of the three credit reference agencies. The core requirement for that is: " The standard level of confirmation, in circumstances that do not give rise to concern or uncertainty, is: > one match on an individual’s full name and current address, and > a second match on an individual’s full name and either his current address or his date of birth." Then you can meet the rest of this requirement just by asking for the first payment into the account to come from a UK or EU bank account. It's hard to see you having a lot of UK resident customers who won't easily be able to meet those requirements since an electoral roll entry and current account would do the job. Harder for foreign. If you get a UK resident who can't pay in with a UK or at least EU current account that'd be enough reason for you to want to make additional checks, I think, since that'd be a suspicious combination of facts and you aren't allowed to ignore those. It seems likely that you're subject to the enhanced due diligence requirements as well, since your customers won't be physically present when being verified most of the time. One of the most broadly applicable ways to do that is to send a letter with a PIN to the customer's claimed address from documents supplied or electronic verification, as at a credit reference agency. Another way is to look up their phone number in a public phone directory and call them at that number, to confirm that the person at the number knows of the application. The purpose of this is to verify that the person applying is really the person that the other evidence relates to, as a way of reducing identity fraud risk. Document copies alone don't do that, since a passport and bank statement can be presented by anyone who has physical access to them even temporarily. The key point though is use electronic verification if at all possible. It'll be by far the easiest way for your customers. The rules are fairly pragmatic in many ways and you may find it useful to read the whole section. You'll probably have some additional requirements due to the nature of your business, perhaps some requirement to try to know the source of the funds once the amount invested exceeds a certain size. Note that while I've read the rules I'm not an expert in this area. I just wanted some actual knowledge rather than false claims that "we have to do x" when the rules are really more flexible than that.
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Post by ablrate on Jul 22, 2014 9:27:49 GMT
It is always difficult to assess a new platform. Investors are naturally wary of committing funds, but it is clear from this forum that loans from some other platforms are eagerly awaited. They obviously have to have acceptable risks and interest rates but, speaking personally, I like to know I can have quick access to funds if needed. I am no longer investing for my old age because unfortunately I am already there. I am a fan of SS because of its simplicity and short term loans, which are snapped up on the secondary market. AC too is popular, and although I have not been investing with them long, I understand that they once had a secondary market charge which they decided to remove. I am looking forward to see what Ablrate has to offer but I would have liked a loan with a shorter term initially since I don't know how popular your secondary market will prove to be and a 1% charge is putting me off too. I see there is an auction element and personally I would prefer simplicity. I gave up the idea of TC because it was too complicated. I don't know how others feel - these are just my ramblings. As others have said, I appreciate your contribution to this forum, and to the way you have responded to comments (and criticisms) here. Hi Smee Thanks for your comments, we really do appreciate everyone's feedback. We aim to make the platform successful so getting user feedback is crucial, whether that be good feedback or not so good feedback, it's all valuable to us. Some of capital equipment loans will be shorter 6 months - 2 years. We are also in discussions to place a loan on the platform that would be as short as three months. Of course a successful secondary market will help with liquidity of funds, and we have put quite a lot of effort into making that a proper market. I can say now that we will not be charging the 1% on Secondary Market purchases for the next 12 months at least - liquidity on that market is more important for us at present. I will have the terms amended to reflect this. We are keen to make sure that the market is as liquid as possible... of course more loans available will assist in this and we are working on those. We take your point on the auction. We recommend borrowers place a fixed rate loan request for that very reason and we agree that the auction process is sometimes too complicated, hence adding in the dynamic bidding to take care of this automatically. We have added our our spin on it however, to make it fairer to all lenders. Most other platforms (if not all) will have the bids where each lender gets the rate they bid and the borrower gets an aggregated amount of all the bids. In some respects we think this is a little unfair. It seems at odds with the 'crowd' element of a transaction that two people can take the same risk and get different rates, albeit rates they have chosen. In this respect we have designed the auction system to be on a 'top down' basis. This means where a loan is funded fully everyione gets the top rate at which it would take to fill a loan. So if, for example, a loan was posted for 10,000 and 6 lenders bid 2,000 - 2 at 8%, 2 at 9%, 1 at 10%, 1 at 11%, the loan would fill at 10% and all lenders would get 10%, even those who bid at 8% - the 11% bidder would be classed as an 'out bid'. When a loan is 100% filled, the borrower has the option to close the loan early or continue to accept bids hoping for a lower rate, you will see this when a blue bar appears saying 'Still Accepting Bids' We have discussed this process at length with potential borrowers and they accept that it is a fair way to conduct an auction; it encourages lenders to bid early, as the loan may close, it potentially brings down long auction periods, it encourages the borrower to give as much detail as possible to encourage lower rates and it makes it less complicated for lenders. We will review the process as we go and welcome feedback of course, but we feel this is a fairer deal for lenders. Others may do this also, we haven't looked at every platform, so forgive us if it is already done elsewhere. Again, thanks for the feedback
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Post by ablrate on Jul 22, 2014 9:47:49 GMT
Those are, sort of but I think not quite correct, the base money laundering identification requirements but you are permitted to use alternative measures where that is appropriate for the risk level or where the person concerned can't fulfil the standard requirements because they lack the required documents. Hi james Thank you so much for your comprehensive comment. When approaching the FCA rules, we want to make sure we are being as compliant as possible hence going for the passport and address checks online. The Tracesmart system (our online verification suppliers) does cross reference date of birth and a number of factors to provide a pass or fail. With the passport we do, of course get the date of birth and you make a very good point about receiving funds from a UK bank account which is, of course, further verification in and of itself. Having said that, we are speaking with Tracesmart this morning to confirm just what you are saying as we have been looking at those rules carefully. The bottom line is that we want to make it as easy to sign up as we can while maintaining the integrity of the rules we are obliged to adhere to. I think, however, that our view on this may have been more rigid than the rules allow, and we may be under-utilising the Tracesmart system for making the verification more simple. We won't compromise on adhering to the rules, but if there is a more efficient way of doing so we will certainly look to implement it. Its ongoing with Tracesmart and I will post any further updates on that here. James, thanks again for taking the time to give us feedback on this. Regards Ablrate
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jul 22, 2014 10:41:32 GMT
ablrateAs we seem to be carrying out a form of 'shakedown cruise' on the site at the moment, couple of bits The loan that is currently listed makes reference in its details & a Q&A response to downloadable documents which support the loan. I cant actually see where to access these documents -probably starring me in the face. Could I suggest you add a documents tab at the top of the loan to provide easy access to this information which most borrowers would probably look for as a priority. And a minor point, there appears to be a typo in the first question of the business section of your support FAQ 'Who is illegible to be a borrower...', should presumably be eligible (Attack of the autocorrects I suspect) Very impressed with your level of enagagement with us on this forum.
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Post by ablrate on Jul 22, 2014 11:58:02 GMT
ablrateAs we seem to be carrying out a form of 'shakedown cruise' on the site at the moment, couple of bits The loan that is currently listed makes reference in its details & a Q&A response to downloadable documents which support the loan. I cant actually see where to access these documents -probably starring me in the face. Could I suggest you add a documents tab at the top of the loan to provide easy access to this information which most borrowers would probably look for as a priority. And a minor point, there appears to be a typo in the first question of the business section of your support FAQ 'Who is illegible to be a borrower...', should presumably be eligible (Attack of the autocorrects I suspect) Very impressed with your level of enagagement with us on this forum. No problem on the engagement, we are new and have to earn our stripes... and a 'shakedown cruise' is most welcome, spelling mistake corrected, thanks! The loan documents are only viewable for verified members (i.e those who have gone through the Tracesmart process), so if you haven't verified yet you will only see an overview. However, if you have verified you can view the transaction summary page (which is accessible by clicking 'Full Details' - again only available to verified members) the downloadable docs are at the bottom of the page above the video. ((Sorry - tried to add an image here but it wont resolve for some reason)) Hope that helps. Regards Ablrate
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shimself
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Post by shimself on Jul 22, 2014 17:40:02 GMT
Good morning shimself, thanks for your interest in Ablrate. The clause is the same, functionally, to that of FCs terms and other p2x platforms. Its purpose is not to negate the rights of a lender to vote on a loan restructure but to protect the best interests of all lending members in the transaction. In reality any restructuring of a loan (which would only happen if to not restructure would cause default), would only be undertaken if all lending parties agreed. However, in exceptional circumstances, and where it is in the best interests of all lending members, it makes sense to have the ability to restructure the loan quickly without putting it to a vote. Exceptional circumstances could be: - In a situation where any delay to achieve a vote would cause default, and where that default would return less to lending members than a restructure. - In a situation where one or more lending members could not be contacted and therefore a quorum could not be achieved, sending a loan into default, where that default would return less to lending members than a restructure - In a situation where there were a hung vote on restructure, causing default etc Those are the kind of exceptional circumstances where this clause would allow us to act quickly to protect the interests of all lending members in the transaction. Thanks again Ablrate Perhaps then you could amend the T&Cs to clarify that you will always seek to obtain an investors vote., the result of which will be decisive. As I understand it they presently say you will always decide for us, and that isn't ok. I don't really accept that there would be no time, I've participated in several votes with TC (and assetz?), done with a couple of days notice, never I think has it been close, nor I think has it ever gone against their recommendation. As for a hung vote, what's the likelihood of that? OK I'll grant you a casting vote if necessary Quorum, not necessary as long as everyone was emailed.
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Post by ablrate on Jul 23, 2014 8:17:25 GMT
Hi shimself
Thanks for your feedback, I will review this clause with the lawyers. The reality of the situation would be that lenders would be involved in any restructuring process, so I have no problem making this clearer.
Regards Ablrate
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shimself
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Post by shimself on Jul 23, 2014 9:54:21 GMT
Hi shimself Thanks for your feedback, I will review this clause with the lawyers. The reality of the situation would be that lenders would be involved in any restructuring process, so I have no problem making this clearer. Regards Ablrate Thanks for positive response
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Post by ablrate on Jul 24, 2014 11:38:15 GMT
Good morning
Just a quick update, we have changed a few things on the platform as promised and some things are still in progress:
1. We have changed the routing of system emails, so verification emails should all be fine now. It was an issue with the way the were going out that had not shown in testing. The issue we had on non-system emails not being received by certain users (Plusnet for example) is ongoing and Rackspace are dealing with that.
2. We are adding a driving license option to the verification and we are in consultation to see how we can remove that requirement entirely while still maintaining the integrity of the rules we are obliged to follow.
3. We are updating the terms to remove the 1% fee on the Secondary Market, so it will not be charged for the next 12 months at least.
4. We are looking at cashback options which will be baked in to each deal on an individual basis and w are keen to get your feedback on the best practices for cashback, what you think is most affective and efficient.
5. The captcha system has been updated.
6. We will be making the clause highlighted by 'shimself' clearer on restructuring ahead of any defaults.
We are also getting new deals approved for launch.
All the best Ablrate
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shimself
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Post by shimself on Jul 24, 2014 14:32:00 GMT
All good stuff
Has anyone found an idiots guide to airline leasing, how volatile can it be, rates to be expected etc. (I started by thinking of the old joke about How to become a millionaire by running an airline (answer - start by being a billionaire))
TC have 2 airline loans at least, one of which has gone horribly wrong
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Post by ablrate on Jul 24, 2014 15:18:10 GMT
All good stuff
Has anyone found an idiots guide to airline leasing, how volatile can it be, rates to be expected etc. (I started by thinking of the old joke about How to become a millionaire by running an airline (answer - start by being a billionaire))
TC have 2 airline loans at least, one of which has gone horribly wrong
Hi These may help: European Regional Airline Association - Investment StudyThis is study undertaken on investment in regional aircraft. One of our directors is actually presenting Ablrate at their CFO conference in November. This is the page on the site that discusses aircraft investments.This is a link to download the aircraft investment index from Ascend - the big data guys in the spaceThis is PWC white paper.... cleverly (!) entitled 'Fasten your seat belts.. ... and not to get to geeky about aircraft investment... this is an interesting chart.. For some reason images not showing with insert image.. so you can click on the below for a larger view... The important thing that you will find from your research is that the airline industry is different from the aircraft industry. We deal with the aircraft industry, and where they are obviously symbiotic to a certain extent they are, in fact, most distinct. We deal in the asset, which is moveable from low demand areas to high demand areas quickly, liquid in the secondary market (certainly for the ATR types we specialise in),is one of the most protected assets around ( Cape Town Convention, etc) and has well trodden protocols for protecting and financing the asset. In over 360 aircraft transactions our CEO has repossessed 3 aircraft which were leased out shortly afterwards to new airlines. There won't be any loans for aircraft into new airlines on our platform, unless there are significant guarantees above the asset value, in fact many existing customers of our lessor sponsors are nation-owned entities and long term customers. We will be doing a series of blog posts on the space as well as putting together some Ablrate investor conferences where we will also cover aircraft investments as well as capital equipment etc, Ablrate process etc etc. - As an aside, please let us know in a PM, or a short comment here, if anyone from the board would be interested in attending, as we are in the process of planning such an event. I could go on, but there is some reading for those interested and we are happy to answer questions on here, via email, on the phone or in person with one of our aircraft guys. Hope that helps All the best Ablrate
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james
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Post by james on Jul 25, 2014 5:03:34 GMT
What steps does the business take to protect itself and its lending customers from systemic risks such as a major flaw being found in the design of a safety-significant part of an aircraft type that may be heavily present in the leased fleet? I'm thinking of issues such as the 737 rudder reversals, ATR icing-related control problems or unexpectedly short airframe life.
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james
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Post by james on Jul 25, 2014 5:41:40 GMT
The core design of the bidding system looks reasonable, particularly the highest rate used by all part, which helps to combat the problem of winner's curse, where the lowest bidders get the loan but the find that they have overvalued it, losing by winning in the auction. That shares a key aspect of the system used by Bondora, which required additional adjusting to prevent two related problems: 1. 1% bids. For some markets a minimum rate was set that was significantly higher than the free market rate that bidders would make. For example, all 1% bids might get the loan at 28% interest. In such an auction the correct bid is 1% or whatever the lowest permitted bid rate is. The lowest bid participants were accepted to fill the loan at the fixed high rate. Bondora recently changed back to a queue system that ignores bid rates, including all bids below the percentage set by Bondora. This is the B and C markets at Bondora. The interest rate is set high to avoid another problem: bidder underestimation of risk level, which is rife in P2P bidding systems. 2. Too low bids. Bondora's A market doesn't have a fixed high minimum rate so bids would work similarly to your system. Again Bondora was forced to change to a queue system rather than low bids participate at highest required rate system. The bidding competition was pushing rates below the reasonable rate and the process of filling loan requests in bid interest rate order led to borrowers asking for relatively low amounts getting very low rates. The very low rates were offered by automated tools provided by Bondora that were being used to try to get participation in higher rate loans. The trade-off for bidders was to estimate the percentage of low rate loans they would get compared to the more sensible rates ones and set a bid percentage that would overall cause an improved result from amounts lent. For example, if half of all loans were finished at 28%, people would bid at say 8% or 10% or 12% to get those, accepting that a portion of their loans would actually end up being completely filled at those lower rates. The low rate ones could be either sold at a discount or retained. Bondora had some control on this, setting a minimum requested interest rate that a borrower could use of 12% but bidders caused the achieved rates to be lower than in a fair number of cases and before they changed their system to queue-based that was getting worse. The current system uses a queue for each borrower-requested maximum interest rate. This gives lenders a reason to bid on lower rate loans without holding out only for the highest. If there was only one queue the rational bid would be high to the highest achievable rate because a matched bid at a lower rate would lose the queue position. 3. Bondora did have a minimum borrower rate and a minimum lender rate but the minimum lender rate was set below the likely economic value of the average loan, 6% in A. It's now set to 15% and enforced. If your system becomes popular with high demand to participate in loans you're also going to have an issue with this and may well need some minimum rational interest rate that bidders are able to use, as a protection for the bidders who may not understand the market. There are also tax-related issues. The problem is in part how bad debt is taxed, without the ability to deduct it from income. What this means is that four bidders with different income tax rates but identical values placed on the loan would make four different bids. 0% tax payers would bid lowest, 45% highest. There are two good ways to deal with this risk. One is to operate within the ISA or SIPP tax wrapper to eliminate the tax difference. The other is some form of fund that will reimburse lenders so that they don't suffer the difference in value. I hope that you have some of these problems because they are caused in part by success: higher lender demand than supply. But to be prepared you might want to set and enforce a minimum permitted rational bid level based on the broader market. At times of high lender demand compared to supply you'd probably find that loans all fill at that rate and the more rational lenders are unable to do any lending at a rate they believe to be sensible. Those lenders would just go elsewhere. There's one other property that you might or might not have noticed. The interest rate for a loan will depend on the amount being borrowed. This is because smaller loans take the bids available at low interest rates and as the size increases the bids that are included in the loan become ever-higher. This has several effects but one you might want to be aware of is that it gives a borrower an incentive to make multiple applications to get a lower average rate. Some restrictions on that are desirable to limit the scope for borrower gaming of the bid system.
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