aju
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Post by aju on Dec 23, 2017 14:11:56 GMT
Not sure if this has been reported here already but according to the Moneywise website. The full story is available here. Apparently the FCA is concerned about the language used in selling these types of products and not enough emphasis is placed on the risks customers face if using P2P as a savings product (really!). Shouldn't they be barking at the relevant site - always behind the curve so to speak - rather than leaving it to someone like Moneywise. Interesting reading though considering how hard it is to get the banks to lend at anything worth saving in I guess it's inevitable that sharks would start circling. Arrrrh! Shiver me timbers  . |
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Post by easteregg on Jan 2, 2018 22:30:53 GMT
I have spoken to a number of financial sites or journalists over the years and they still use the word "saver" or "savings" which drives me mad! My own view is that P2P isn't saving, but neither is it investing - it something unique - it is lending.
Saving is perceived to be risk free - which actually it isn't - but that is the perception. Investing is perceived to be risky with the potential for 100% loss or near infinite gain, with volatility and restricted liquidity.
Peer-to-peer lending has the potential for near 100% loss - but that is unlikely and can be mitigated by diversification - but only limited gain (the interest rate). There is little volatility but the liquidity is still quite restrictive.
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aju
Member of DD Central
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Post by aju on Jan 3, 2018 0:48:05 GMT
that old favourite phrase "Caveat emptor" springs to mind - I knew my edukation at the esteamed eton would cum in andy one day ....
For those less fortunate soles that av to mak du with wackypeedia the translation as follows will sufice..
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ceejay
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Post by ceejay on Jan 3, 2018 9:54:12 GMT
Well, up to a point. If the seller of a house makes a false statement within any of the documentation that forms part of the contract, then the seller is liable. In the P2P context, I guess the analogy would lead us to the loan offers that are presented for our consideration. If they contain false information, who is responsible? Borrower, platform or lender? It should depend on whether the information is contained within a document that forms part of the contract, a distinction which is not always as obvious as it should be. Having said that, it ought to be clear that a table on a price comparison website isn't contractual, though even that boundary is being blurred if said comparison website is taking referral commissions.
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aju
Member of DD Central
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Post by aju on Jan 3, 2018 11:19:37 GMT
yeah I agree, the house bit did seem a bit flakey to me but I found it amusing none the less. Personally I've always been a bit wary of any investment or savings and at my age I don't really have time to recover from bad mistakes so my mind is always more focused on taking minimum risks possible.
As for price comparison sites not sure I'd trust them that far at all. I do use them but specifically more for a pointer to further investigation. For instance energy comparisons are a real mess with the relevant regulators making it worse (except for MSE that is). Fortunately I'm pretty good with a spreadsheet and I just get the basic unit costs and do my own calcs to see if I will benefit.
The other thing that many people probably don't factor in is that all these sites are looking for their own interests first and are taking a cut to make them work for them - i've read somewhere it's in the region of £40. There is also the thorny issue of price blocking (apparently some site rule that the price must not be lower elsewhere). In some circles the thinking is that this stifles rather than promoting it.
I'm guessing that the waters are going to get further muddied with the recent open banking stuff as well.
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