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Post by jimothemill on Dec 2, 2017 23:10:59 GMT
Is anyone else as disappointed in FC as I am?
Where to start.
Firstly, it seems as they’ve grown they have gotten worse. They have taken away your choice of what businesses you lend to as well as the amount you invest. The recent change is 0.5% portfolio and two default lending settings. This system is flawed as you could potentially end up loaning to 1 company twice.
There is no easily available transparency of where funds go. One minute you have 500. Next it’s gone and you don’t know where. When a loan defaults, the risk bracket is removed to prevent you seeing what category failed.
Their rating system for assessing companies for loans must be atrocious. People with bad track records, 500k outstanding and nothing secured to back up getting A+ loans. What look like good companies on paper are C. Go figure.
The new ISA forms a separate account meaning you’ll now have 2 fc accounts which you cannot trade loans to. You have to withdraw your money into your bank and re-deposit in the new account to get the result you want. Also will not allow to transfer existing ISA accounts from other sources - which rules out pretty much everyone.
Between bad debt and fees you lose on average a third of your profit before tax.
FC have deleted their own official chat forum because of heated arguments - when really it was to stop people talking and forming a group opinion to leave the platform.
Anyone find the same problems? Anything I’m missing or wrong about? I’m all ears
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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 Dec 2, 2017 23:30:34 GMT
I think you'll find that disappointment in Frequently Criticised* is a fairly regular view around these parts
* - a bit like the Shakespeare's Scottish Play, it is convention on the forums not to refer to the platform by name but to describe it using appropriate words starting with its intitials
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Post by jimothemill on Dec 2, 2017 23:35:54 GMT
I’m not familiar but thanks
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Post by skint4achange on Dec 3, 2017 9:53:29 GMT
Is anyone else as disappointed in FC as I am? Where to start. Firstly, it seems as they’ve grown they have gotten worse. They have taken away your choice of what businesses you lend to as well as the amount you invest. The recent change is 0.5% portfolio and two default lending settings. This system is flawed as you could potentially end up loaning to 1 company twice. There is no easily available transparency of where funds go. One minute you have 500. Next it’s gone and you don’t know where. When a loan defaults, the risk bracket is removed to prevent you seeing what category failed. Their rating system for assessing companies for loans must be atrocious. People with bad track records, 500k outstanding and nothing secured to back up getting A+ loans. What look like good companies on paper are C. Go figure. The new ISA forms a separate account meaning you’ll now have 2 fc accounts which you cannot trade loans to. You have to withdraw your money into your bank and re-deposit in the new account to get the result you want. Also will not allow to transfer existing ISA accounts from other sources - which rules out pretty much everyone. Between bad debt and fees you lose on average a third of your profit before tax. FC have deleted their own official chat forum because of heated arguments - when really it was to stop people talking and forming a group opinion to leave the platform. Anyone find the same problems? Anything I’m missing or wrong about? I’m all ears Hi Jim,
Welcome to the forum where you may learn a lot but will also be so frightened by some of the things you read that you will put all your money under your bed and sleep on it 23 hours a day! 
Just to address a couple of your points, firstly, I have over 2000 loan parts and I have not made a loan to the same company twice in any of them. Not sure if it can/will happen but even so, may not be a bad thing, depends on the company.
The transparency of where your funds go is a little blue highlighted area just below "My Loan Parts" that says "More Detail". By clicking that it will open up and show you all your loan parts. By clicking then on the "Loan Title" you can open up the loan and see what it is.
No rating system on companies is flawless and I usually take about as much notice of the risk bands as I do of politicians, NONE. Most of the default loans on the FC loan book are A or A+.
ISA's have to be held on a separate account, that is the law and it is regulated by HMRC. You are not allowed by law to transfer in your own investments, that is another regulatory requirement. There are people on here (I think if you look in the Goji forum there is a much better explanation by the Goji MD who is also head of the P2P ISA committee or something). Transfers in are apparently quite complicated (See same Goji thread) and some companies cannot handle the way that the transfer happens. Believe it or not in this digital world, ISA transfers are still made using a cheque??
Bad debts can be written off against any tax payable. Depending on how much you have invested will depend on how much this is and how much of an impact it has. All I can say about that is look at your bottom line. If you are earning within the 95th percentile ratings then the platform is operating as expected and we all assume there will be losses/defaults along the way.
I can't answer about the FC forum being deleted because I never took part in it, but as I said, if you stay on here long enough.................................................................... 
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blender
Member of DD Central
Posts: 5,719
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Post by blender on Dec 3, 2017 10:36:09 GMT
It's a difficult question, jimothemill. Am I disappointed that Fundamentally Changed no longer offers me the opportunity to use my small skills to gain a higher return? - yes. Am I disappointed that it has changed in the five years plus during which I have held an account? - no. They have made continual changes aimed at identifying and even creating the core market that they wish to address - essentially what was the savings market. They had to start with lenders who were experienced and engaged and who wished to gain a higher return than the Autobidders, who were a new creation in lending and always represented the target market in the mature business, with ISAs attached. Ordinary investor/lenders are not interested in the individual loans - just the easy returns. During the development process I and others made really good returns, especially from ventures such as property development, which just did not fit the SME platform. Personally I just say 'so long, and thanks for all the fish'. Though I still have two property portfolios, to be sold in the next few months, and may consider an effort-free ISA at 7.5% in 2018/9. We have to judge these platforms as they are, with an idea of where they are going, rather than what they were or what we would wish them to be.
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Post by jimothemill on Dec 3, 2017 12:33:08 GMT
I appreciate the input. I’ve found that in the 2 years I’ve been lending there has been a lot of change that they say is to make it better and easier for everyone, but the reality is a more average return for all. Lenders at the top come down and bottom lenders come up with their new policies. Capitalism to socialism😌
I’ve had over and back with admin and they have admitted that yes it is possible to lend twice. For example, if before the change I lend £60 to a company. After the change my 0.5% portfolio is £120 let’s say. That company now needs a refinance loan so technically I could be refinancing my own loan for £60 with another £60.
What I mean about info being difficult to obtain is particularly with the app, but even the website isn’t straight forward. Once a loan is downgraded they remove the risk band. I don’t know why?
I don’t mean to come across as a moaner or negative, I don’t know anyone else doing this and as you can probably tell I’m still a bit of a novice! it’s nice to hear other peoples opinions. Thank you.
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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
Posts: 11,329
Likes: 11,549
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Post by ilmoro on Dec 3, 2017 13:05:54 GMT
Is anyone else as disappointed in FC as I am? Where to start. Firstly, it seems as they’ve grown they have gotten worse. They have taken away your choice of what businesses you lend to as well as the amount you invest. The recent change is 0.5% portfolio and two default lending settings. This system is flawed as you could potentially end up loaning to 1 company twice. There is no easily available transparency of where funds go. One minute you have 500. Next it’s gone and you don’t know where. When a loan defaults, the risk bracket is removed to prevent you seeing what category failed. Their rating system for assessing companies for loans must be atrocious. People with bad track records, 500k outstanding and nothing secured to back up getting A+ loans. What look like good companies on paper are C. Go figure. The new ISA forms a separate account meaning you’ll now have 2 fc accounts which you cannot trade loans to. You have to withdraw your money into your bank and re-deposit in the new account to get the result you want. Also will not allow to transfer existing ISA accounts from other sources - which rules out pretty much everyone. Between bad debt and fees you lose on average a third of your profit before tax. FC have deleted their own official chat forum because of heated arguments - when really it was to stop people talking and forming a group opinion to leave the platform. Anyone find the same problems? Anything I’m missing or wrong about? I’m all ears Hi Jim,
[snip]
ISA's have to be held on a separate account, that is the law and it is regulated by HMRC. You are not allowed by law to transfer in your own investments, that is another regulatory requirement. There are people on here (I think if you look in the Goji forum there is a much better explanation by the Goji MD who is also head of the P2P ISA committee or something). Transfers in are apparently quite complicated (See same Goji thread) and some companies cannot handle the way that the transfer happens. Believe it or not in this digital world, ISA transfers are still made using a cheque??
Bad debts can be written off against any tax payable. Depending on how much you have invested will depend on how much this is and how much of an impact it has. All I can say about that is look at your bottom line. If you are earning within the 95th percentile ratings then the platform is operating as expected and we all assume there will be losses/defaults along the way.
[snip]
The rules permit trading parts between loan accounts as long as they are offered on an open market and at the market price, it doesnt allow bed & ISA by a platform. FC have decided not to permit any movement of loan parts between accounts, other platforms permit this providing it doesnt breach the rules. FC have also decided not to permit cash to be moved between accounts directly which is odd as this doesnt breach any rules particularly as it is a flexible ISA (eg fine on ABL even though accounts use seperate email). FC isnt offering transfer ins at the moment to control demand. They shouldnt be complicated and can be made by BACS though most P2P platforms arent part of the BACS transfer scheme yet, though their client accounts should be. (Biggest issue was a mainstream provider struggling with a non-cheque transfer, transfers to P2P have been quick IME) Not sure bad debts on an ISA account can be offset against tax. I left FC several years ago due to increasing bad debts though still have legacy loans. I dont actually know how much I have in each of these loans as the site still seems to display my holding at default despite subsequent repayments.
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IFISAcava
Member of DD Central
Posts: 3,692
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Post by IFISAcava on Dec 3, 2017 13:24:24 GMT
Hi Jim,
[snip]
ISA's have to be held on a separate account, that is the law and it is regulated by HMRC. You are not allowed by law to transfer in your own investments, that is another regulatory requirement. There are people on here (I think if you look in the Goji forum there is a much better explanation by the Goji MD who is also head of the P2P ISA committee or something). Transfers in are apparently quite complicated (See same Goji thread) and some companies cannot handle the way that the transfer happens. Believe it or not in this digital world, ISA transfers are still made using a cheque??
Bad debts can be written off against any tax payable. Depending on how much you have invested will depend on how much this is and how much of an impact it has. All I can say about that is look at your bottom line. If you are earning within the 95th percentile ratings then the platform is operating as expected and we all assume there will be losses/defaults along the way.
[snip]
The rules permit trading parts between loan accounts as long as they are offered on an open market and at the market price, it doesnt allow bed & ISA by a platform. FC have decided not to permit any movement of loan parts between accounts, other platforms permit this providing it doesnt breach the rules. FC have also decided not to permit cash to be moved between accounts directly which is odd as this doesnt breach any rules particularly as it is a flexible ISA (eg fine on ABL even though accounts use seperate email). FC isnt offering transfer ins at the moment to control demand. They shouldnt be complicated and can be made by BACS though most P2P platforms arent part of the BACS transfer scheme yet, though their client accounts should be. (Biggest issue was a mainstream provider struggling with a non-cheque transfer, transfers to P2P have been quick IME) Not sure bad debts on an ISA account can be offset against tax.I left FC several years ago due to increasing bad debts though still have legacy loans. I dont actually know how much I have in each of these loans as the site still seems to display my holding at default despite subsequent repayments. Indeed they can't. Well, theoretically I suppose they could, only there isn't any tax paid in an IFISA to offset against! All the tax has already been offset by using the ISA wrapper. Even so, as long as you make a profit within your ISAs as a whole (i.e. interest>defaults) you are better off in than out.
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Post by df on Dec 3, 2017 16:42:58 GMT
Is anyone else as disappointed in FC as I am? Where to start. Firstly, it seems as they’ve grown they have gotten worse. They have taken away your choice of what businesses you lend to as well as the amount you invest. The recent change is 0.5% portfolio and two default lending settings. This system is flawed as you could potentially end up loaning to 1 company twice. There is no easily available transparency of where funds go. One minute you have 500. Next it’s gone and you don’t know where. When a loan defaults, the risk bracket is removed to prevent you seeing what category failed. Their rating system for assessing companies for loans must be atrocious. People with bad track records, 500k outstanding and nothing secured to back up getting A+ loans. What look like good companies on paper are C. Go figure. The new ISA forms a separate account meaning you’ll now have 2 fc accounts which you cannot trade loans to. You have to withdraw your money into your bank and re-deposit in the new account to get the result you want. Also will not allow to transfer existing ISA accounts from other sources - which rules out pretty much everyone. Between bad debt and fees you lose on average a third of your profit before tax. FC have deleted their own official chat forum because of heated arguments - when really it was to stop people talking and forming a group opinion to leave the platform. Anyone find the same problems? Anything I’m missing or wrong about? I’m all ears I’m disappointed with 18 Sept changes. I prefer to choose the loans I’m investing in. However, I’ve made my decision to stay and keep my funds there on autobid, so I had to accept that I have no control over my investments. I used to have 0.4% portfolio, so 0.5% was good enough for me. I doubt you would be lending to the same business twice, that’s the whole point of their diversification system to prevent this from happening. You can see which loans your funds got invested. The loan view is still the same as used to be. But how does it matter? You can’t change anything under autobid “regime” anyway. I’ve looked at it for the first couple of weeks, just out of interest to see what’s happening. Was disappointed to see appearance of A+ and property loans, but that’s what I expected to happen. I don’t look at details any more, just keeping an eye on overall performance. Their grading system was no different before the change. I often wandered why some C loans look more solid than some A+? Don’t know how they do their grading, but it doesn’t make any sense to me. The increasing number of defaults is disappointing, especially because most of them happen at very early stage (at least in my experience).
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Post by jimothemill on Dec 3, 2017 17:33:30 GMT
Absolutely. A+ defaulting after just 3 payments is frustrating. I’ll give it this year and see how it pans out. I’m assuming the one good thing about the recent changes is that you can sell up pretty quickly?
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Post by skint4achange on Dec 3, 2017 19:01:41 GMT
No they can't, but the OP wasn't talking about ISA bad debts??
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Post by df on Dec 3, 2017 20:11:10 GMT
Absolutely. A+ defaulting after just 3 payments is frustrating. I’ll give it this year and see how it pans out. I’m assuming the one good thing about the recent changes is that you can sell up pretty quickly? Yes that was one of the factors that made me stay. It's good to know that you can get out of it quick if you need to. I've decided to give it a go until next September, but if my return goes below 7% I'll start thinking about where to redeploy my FC funds earlier. So far I'm content with how it goes - annualised return 7.6% (only 1% below the estimated), I can live with this.
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mikeb
Posts: 1,072
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Post by mikeb on Dec 3, 2017 20:20:31 GMT
I’m not familiar but thanks Well, once you do become Familiar: Contempt!  You seem to have summed the FC situation well, but other lenders disagree and love the new system.
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markr
Member of DD Central
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Post by markr on Dec 4, 2017 16:02:44 GMT
No rating system on companies is flawless and I usually take about as much notice of the risk bands as I do of politicians, NONE. Most of the default loans on the FC loan book are A or A+. This information used to be easily available from FC's own stats, but now it has to be worked out from the loan book, so here's my summary: | Risk Band | Total Loans | Defaults | Percent default | | A+ | 11207 | 158 | 1.41 | | A | 11910 | 442 | 3.71 | | B | 8991 | 505 | 5.62 | | C | 6455 | 468 | 7.25 | | D | 3608 | 265 | 7.34 | | E | 1080 | 75 | 6.94 |
These figures are numbers of loans, with no weighting given to the loan amount, and is for the entire loan book, including property. Really, the only anomaly is the E band, but this is probably just the relative age and size of this cohort. C and D are also rather close, but again D is a younger category and includes the previous C- band, which may have had a different risk profile. What is clearly *not* true is that most of the defaults are A+ and A, even in absolute terms this is not true never mind in percentage terms.
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Post by skint4achange on Dec 4, 2017 16:08:47 GMT
No rating system on companies is flawless and I usually take about as much notice of the risk bands as I do of politicians, NONE. Most of the default loans on the FC loan book are A or A+. This information used to be easily available from FC's own stats, but now it has to be worked out from the loan book, so here's my summary: | Risk Band | Total Loans | Defaults | Percent default | | A+ | 11207 | 158 | 1.41 | | A | 11910 | 442 | 3.71 | | B | 8991 | 505 | 5.62 | | C | 6455 | 468 | 7.25 | | D | 3608 | 265 | 7.34 | | E | 1080 | 75 | 6.94 |
These figures are numbers of loans, with no weighting given to the loan amount, and is for the entire loan book, including property. Really, the only anomaly is the E band, but this is probably just the relative age and size of this cohort. C and D are also rather close, but again D is a younger category and includes the previous C- band, which may have had a different risk profile. What is clearly *not* true is that most of the defaults are A+ and A, even in absolute terms this is not true never mind in percentage terms. Perhaps I should have phrased that as "Most of the FC loans on MY loan book", I wasn't however expecting to be made to go to the head masters office for the typo. 
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