shimself
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Post by shimself on Apr 29, 2018 15:01:17 GMT
Client accounts Does anyone here know how banks safeguard client accounts from making improper payments. For instance by asking for supporting documentation, by ensuring the beneficiary is a third party (not that that works here I think). Or something?
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ceejay
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Post by ceejay on Apr 29, 2018 15:20:35 GMT
Client accounts Does anyone here know how banks safeguard client accounts from making improper payments. For instance by asking for supporting documentation, by ensuring the beneficiary is a third party (not that that works here I think). Or something? I think you may be expecting too much of banks here - are you really expecting them to police every payment made out of a client account? Surely the sole point of designating money as "client" is to stop it being grabbed by creditors in the event of insolvency or some other legal attack on the platform.
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radar
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Post by radar on Apr 29, 2018 15:22:27 GMT
Anyone that feels they may want to take legal action in the future with regard to their investments through COL needs to be very careful not to prejudcice their chances of success by their actions taken in haste now. The choice of words made in any written statements (to the administrators) now could have major consequence in the future, and could leave your legal representives defending your choice of words rather than soley attacking the actions of COL's directors and staff. If in any doubt, take legal advice before acting. I agree entirely with what you say, these emails can only delay any closure of this sorry story, apparently the web site is intact, and if not I am sure they will have to ask for proof of your loans and not through emails( anyone could send an email "I have loans totaling £xxx" ) I certainly cannot see any reason why an email would carry any benefit unless requested, besides I expect the great majority of Lenders do not contribute to this forum and they have the same rights as forumites
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elliotn
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Post by elliotn on Apr 29, 2018 15:53:52 GMT
Client accounts Does anyone here know how banks safeguard client accounts from making improper payments. For instance by asking for supporting documentation, by ensuring the beneficiary is a third party (not that that works here I think). Or something? I thought there were, it could only go back to the payer account (ie lender account 1:1) or to a borrower client account (ie multiple lenders to single borrower) which would be verified by the bank when requested. Let me come back on this.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Apr 29, 2018 15:55:28 GMT
"The choice of words made in any written statements (to the administrators) now could have major consequence in the future"
I'm not sure that's entirely correct. Any Judge/Legal Eagle/Administrator would know and appreciate that, as a layman, you are capable of inadvertently using the wrong adjective to describe yourself. If you are a Lender and unintentionally refer to yourself in correspondence as a Creditor I don't think it will make a jot of difference and won't be held against you.
Obviously it's better to get your "Title" as Lender correct from the get go, but if you don't, our legal system and Administrators/BDO aren't that draconian!
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elliotn
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Post by elliotn on Apr 29, 2018 16:16:46 GMT
Client accounts Does anyone here know how banks safeguard client accounts from making improper payments. For instance by asking for supporting documentation, by ensuring the beneficiary is a third party (not that that works here I think). Or something? I thought there were, it could only go back to the payer account (ie lender account 1:1) or to a borrower client account (ie multiple lenders to single borrower) which would be verified by the bank when requested. Let me come back on this. Here’s a link to the institute of chartered accountants' client account guidelines (what I saw from fca was basically a template signed by directors not to misuse the monies) - I haven't read details yet as need to hit the sack but happy to come back on this if anyone can't get head around it: www.icaew.com/-/media/corporate/files/members/practice-centre/clients-money/clients-money-regulations-effective-1-january-2017.ashxEdit - looks like responsibility is designated to a principal at the firm ie not bank's responsibility but any breaches would be a joint and several liability of the principlals in light of any disciplinary actions ie can chase the directors personally should anything untoward be proven.
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chris1200
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Post by chris1200 on Apr 29, 2018 16:33:37 GMT
I hope no one deems this engaging in unhelpful speculation, but I've been thinking about the logical conclusion of the creditor vs. lender/investor debate and wanted to check others' opinion on this. Apologies, as ever, if this has been covered elsewhere and I've missed it.
If we are eventually deemed as creditors,* the likely result seems to me that which loans we invested in, the performance of specific loans, the recoverability of funds if loans default, whether our specific money was lent out or held as cash (and perhaps wrongfully dissipated) etc. etc., will all be irrelevant to us as individuals. Instead, the administrators will recover as much as they can, and then all of us will receive an identical p in the £ rate, regardless of where our specific money was or what happened to it.
I hope I'm wrong on this (as, for example, I bought up quite a lot of very secure first-ranking Bolton loan parts literally days before this all went caput)**... but I fear this is how it would play out? Thoughts?
*I should say clearly that I do not believe that we are creditors.
**On the other hand, I guess for some people this could give them a higher rate of recovery than they would have otherwise...!
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investibod
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Post by investibod on Apr 29, 2018 17:15:37 GMT
I am no expert in these matters, so welcome an explanation of why I am wrong, but until then my belief is this:
We are not creditors of Collateral regarding the loans presently with the borrowers. The deal is between ourselves and the borrowers with Col acting as agents/facilitators.
However, regarding interest (and any capital) payments made by the borrowers to Col, we are creditors as Col have our money - unless it has been spirited away. The same applies to any money we invested which never made it to borrowers. If we are not creditors, then the only conclusion I can think of is that we be victims of theft and/or fraud.
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justme
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Post by justme on Apr 29, 2018 17:17:57 GMT
.[/p] It shows how important regulation is in protecting client money - lenders should not have to trust operators with their cash.
[/quote] I do not understand what would be the difference if the platform had full FCA approval- if business owners want to ex tract the cash what would stop them ? How would it be different now if Collateral had an approval? How in practice one can check validity of those approvals keeping in mind all possible newances of slightly different names/different activities as well as possibility of an approval being revoked as apparently happened here? Is not it all the fig leaf and the truth is ANY platform can disappear any time , approval or not and take away whatever money/leave behind a mess like that ?
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chris1200
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Post by chris1200 on Apr 29, 2018 17:21:45 GMT
I am no expert in these matters, so welcome an explanation of why I am wrong, but until then my belief is this: We are not creditors of Collateral regarding the loans presently with the borrowers. The deal is between ourselves and the borrowers with Col acting as agents/facilitators. However, regarding interest (and any capital) payments made by the borrowers to Col, we are creditors as Col have our money - unless it has been spirited away. The same applies to any money we invested which never made it to borrowers. If we are not creditors, then the only conclusion I can think of is that we be victims of theft and/or fraud. Yes, as I said in my post, I also do not believe we are creditors (although I don’t follow all the logic in your final para). However, I am also not an expert in this area of law. The hearing on Friday also appears to have been unclear on this point. Therefore, my question was regarding the eventuality that we *are* deemed creditors.
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investibod
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Post by investibod on Apr 29, 2018 17:28:43 GMT
I am no expert in these matters, so welcome an explanation of why I am wrong, but until then my belief is this: We are not creditors of Collateral regarding the loans presently with the borrowers. The deal is between ourselves and the borrowers with Col acting as agents/facilitators. However, regarding interest (and any capital) payments made by the borrowers to Col, we are creditors as Col have our money - unless it has been spirited away. The same applies to any money we invested which never made it to borrowers. If we are not creditors, then the only conclusion I can think of is that we be victims of theft and/or fraud. Yes, as I said in my post, I also do not believe we are creditors (although I don’t follow all the logic in your final para). However, I am also not an expert in this area of law. The hearing on Friday also appears to have been unclear on this point. Therefore, my question was regarding the eventuality that we *are* deemed creditors. My thought process is that if Col are holding interest payments which were due to us but collected by them on our behalf, then they owe that money to us. Therefore they are in debt to us for that amount and we are by nature of that, their creditors. Of course, that thought is based on what seems logical to me. When has the law reflected what seems logical?
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chris1200
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Post by chris1200 on Apr 29, 2018 17:34:18 GMT
My thought process is that if Col are holding interest payments which were due to us but collected by them on our behalf, then they owe that money to us. Therefore they are in debt to us for that amount and we are by nature of that, their creditors. Of course, that thought is based on what seems logical to me. When has the law reflected what seems logical? I think it’s potentially a bit more complicated than that as creditors are generally paid out at a p/£ rate, whereas such money could be deemed client money over which we have a beneficial interest. BUT - the point wasn’t to re-hash the creditor vs. lender/investor debate. My question is purely premised on the scenario that we are deemed creditors. I don’t wish to be rude, but I’m not planning on having a debate re the former at this stage as I just don’t have the expertise to do so!
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pom
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Post by pom on Apr 29, 2018 17:49:22 GMT
Yes, as I said in my post, I also do not believe we are creditors (although I don’t follow all the logic in your final para). However, I am also not an expert in this area of law. The hearing on Friday also appears to have been unclear on this point. Therefore, my question was regarding the eventuality that we *are* deemed creditors. My thought process is that if Col are holding interest payments which were due to us but collected by them on our behalf, then they owe that money to us. Therefore they are in debt to us for that amount and we are by nature of that, their creditors. Of course, that thought is based on what seems logical to me. When has the law reflected what seems logical? Perhaps a bit premature to be worrying about interest payments (and sorry I realise not just you, you're just the latest to have mentioned it)....primary concern should be getting our capital back.....(and no this does not mean I'm waiving any interest in my interest! ![(rofl)](//storage.proboards.com/forum/images/smiley/rofl.png) )
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investibod
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Post by investibod on Apr 29, 2018 17:57:13 GMT
My thought process is that if Col are holding interest payments which were due to us but collected by them on our behalf, then they owe that money to us. Therefore they are in debt to us for that amount and we are by nature of that, their creditors. Of course, that thought is based on what seems logical to me. When has the law reflected what seems logical? Perhaps a bit premature to be worrying about interest payments (and sorry I realise not just you, you're just the latest to have mentioned it)....primary concern should be getting our capital back.....(and no this does not mean I'm waiving any interest in my interest! ![(rofl)](//storage.proboards.com/forum/images/smiley/rofl.png) ) Agreed. If I come out of this with anything like 100% capital return, I will feel very lucky that the learning experience was not as painful as it could have been.
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investibod
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Post by investibod on Apr 29, 2018 18:06:13 GMT
I think it’s potentially a bit more complicated than that as creditors are generally paid out at a p/£ rate, whereas such money could be deemed client money over which we have a beneficial interest. BUT - the point wasn’t to re-hash the creditor vs. lender/investor debate. My question is purely premised on the scenario that we are deemed creditors. I don’t wish to be rude, but I’m not planning on having a debate re the former at this stage as I just don’t have the expertise to do so! Without wishing to continue a debate where you do not, so I will finish by agreeing with you in that: - I sincerely hope that the accounts can be suitable deciphered to show what is "our" money as opposed to assets of Col, so that it can be returned to us.
- I also do not have the expertise. These is a new experience for me and not one I would have wished to be involved with.
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