IFISAcava
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Post by IFISAcava on Jun 29, 2018 18:01:00 GMT
Why would you face a capital loss when there is a PF that has yet to be used? The issue is more that until the loans are recovered or declared irrecoverable, the money is stuck. Because the size of the PF was recently revealed to be only £116k. With the closure of the account to new investment, this isn't going to rise a significant amount before the loans close out. I'm (pessimistically?) predicting the losses to be larger than this, although as I said, this is hard to gauge with any degree of accuracy.
If so, then the fact the money is stuck is just the fly on the turd.
Yes, I see now - £6 million+ in suspended loans (although I don't think we know know much of that is in the GEIA - I would assume a (un)healthy proportion), and a PF of £116K. Hadn't realised that degree of potential shortfall. I have to agree, My £7K investment in the GEIA, although giving a warm fuzzy feeling for a while, now has £3 and a bit K stuck in the four I** loans, and had I known how little the PF covered I wouldn't have invested (I did know the allocations could be up to 20% per loan, but I had thought the PF would mean that didn't matter so much). The other issue was not being able to sell at a discount, so couldn't get out of those loans when the writing was on the wall - whereas I did (mostly) in the MLIA. Learnt the lesson, and now I do only MLIA and QAA/30 days
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ashtondav
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Post by ashtondav on Jun 30, 2018 8:09:31 GMT
If this is a true and accurate depiction of the AC PF, I think AC will kick this can down the road as long as possible. I must admit it had not registered with me that the PF was so small compared to the liability.
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trouble
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Post by trouble on Jun 30, 2018 9:56:50 GMT
Why would you face a capital loss when there is a PF that has yet to be used? The issue is more that until the loans are recovered or declared irrecoverable, the money is stuck. Because the size of the PF was recently revealed to be only £116k. With the closure of the account to new investment, this isn't going to rise a significant amount before the loans close out. I'm (pessimistically?) predicting the losses to be larger than this, although as I said, this is hard to gauge with any degree of accuracy.
If so, then the fact the money is stuck is just the fly on the turd.
I must have missed this. Is that the total PF at AC or just the bit covering the GEA? Where did you get this from and are the other PF figures out there as well? Thanks
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IFISAcava
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Post by IFISAcava on Jun 30, 2018 10:30:32 GMT
Because the size of the PF was recently revealed to be only £116k. With the closure of the account to new investment, this isn't going to rise a significant amount before the loans close out. I'm (pessimistically?) predicting the losses to be larger than this, although as I said, this is hard to gauge with any degree of accuracy.
If so, then the fact the money is stuck is just the fly on the turd.
I must have missed this. Is that the total PF at AC or just the bit covering the GEA? Where did you get this from and are the other PF figures out there as well? Thanks Just for the the GEA - just click on the account and it now states the PF size (this is a recent change).
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dandy
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Post by dandy on Jul 3, 2018 10:00:24 GMT
loan #227
£6m. Overdue. Interest free extension of 6 months (until September). No foreseeable repayment within extension.
Meanwhile, director hands himself a £400k interest free loan with no repayment terms.
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alibaba
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Post by alibaba on Jul 3, 2018 10:20:17 GMT
You are, of course, correct. But the level of diversification offered, together with the way the PF functioned meant they were very inadequate, ill thought out products, not really fit for purpose, and bound to result in the scabrous comments seen on this thread. Very silly product design, and very flawed - if not toxic. Yep, couldn't agree more in the form they first appeared. Originally a complete black box (which has now been fixed). Originally with no automatic PF payments for late interest (now been fixed) – although AC’s explanation of this is as a ‘technical glitch’ felt a little dubious. Originally no complete explanation of how the PFs would work (now fixed). Originally no automatic diversification (now fixed). Originally no clear documentation of the size of the PFs (now fixed). So while there have been improvements in the functionality and transparency of these accounts, unfortunately, all these changes have come too late for many investors. In hindsight, they should never have been released by AC in their original guise.
Which begs the question, why did I invest in the first place? Firstly, I have only a toe dip in the GEA (3% of my total p2p exposure) and slightly more in the GBBA (~6%). I don’t have the time or expertise to do the quantity and quality of DD as many on this forum, so automated accounts appealed to me and I wanted to test them out. Secondly, the general consensus is that AC is (one of) the most professional, well-run p2p platforms, so there was an element of blind trust (I suppose it had to be blind given the original complete black box situation), for which I can only blame myself. Thirdly, the chatter about the PFs ‘not being guaranteed only because it would then be called insurance’ gave me the belief, naively it seems, that the PFs were extremely well backed and would only fail in extreme circumstances - in a similar fashion to how people treat the instant access of the QAA now. Had the size of the PFs, especially for the GEA, been clearly documented at the time, I definitely wouldn’t have invested.
Personally, I have over 60% of my GEA in the turbine loans (a failing in borrower diversification if not a technical breach of the 20% rule). It’s hard to even guesstimate the return from these but the updates don’t make good reading to my inexpert eye. I’m bracing myself for potential capital losses way above and beyond the (IMO inadequate) PF. If so, and despite only being a toe dip, I’m looking at investing in the GEA as being one of the worst investment decisions I’ve made in p2p.
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alibaba
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Post by alibaba on Jul 3, 2018 10:21:04 GMT
This is getting more concerning by the day
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m2btj
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Post by m2btj on Jul 3, 2018 10:43:06 GMT
loan #227 £6m. Overdue. Interest free extension of 6 months (until September). No foreseeable repayment within extension. Meanwhile, director hands himself a £400k interest free loan with no repayment terms. I would expect AC to give a commentary for this! On the face of it, looks outrageous & shows a total lack of director responsibility. Let's have an investor vote on this one. Option A: Call in the loan with immediate effect including outstanding interest! Option B: Call in the loan with immediate effect including outstanding interest!
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dandy
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Post by dandy on Jul 3, 2018 11:19:21 GMT
I would expect AC to give a commentary for this! On the face of it, looks outrageous & shows a total lack of director responsibility. Let's have an investor vote on this one. Option A: Call in the loan with immediate effect including outstanding interest! Option B: Call in the loan with immediate effect including outstanding interest! To be fair there could be a reasonable explanation. Ideally it would have come 4 months ago, at the same time the borrower proposed to us that we waive ~ £400k in interest.
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m2btj
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Post by m2btj on Jul 3, 2018 11:42:26 GMT
I would expect AC to give a commentary for this! On the face of it, looks outrageous & shows a total lack of director responsibility. Let's have an investor vote on this one. Option A: Call in the loan with immediate effect including outstanding interest! Option B: Call in the loan with immediate effect including outstanding interest! To be fair there could be a reasonable explanation. Ideally it would have come 4 months ago, at the same time the borrower proposed to us that we waive ~ £400k in interest. An explanation would be a good starting point.
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cb25
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Post by cb25 on Jul 3, 2018 13:10:52 GMT
loan #227 £6m. Overdue. Interest free extension of 6 months (until September). No foreseeable repayment within extension. Meanwhile, director hands himself a £400k interest free loan with no repayment terms. Have you raised this with AC, e.g. via their Q&A ?
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Post by bikeman on Jul 4, 2018 16:03:55 GMT
That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future. Considering the tone and content of your post I feel obliged to counter this for the sake of other forum readers, your points in order: 1, Yes 20% was cited as a possible example of how diversification could work and it was clearly explained this could well happen. And you are surprised that it actually did this when you knew this information existed at the time you invested (or should have) So here you are trying to discredit AC when their product did what the example said, now that is BS in my book. I , like many on this forum, invested in the GBBA and GEA, but having an understanding of how it could invest our money limited our investment to amounts we were comfortable being invested in individual loans and also added smaller amounts over a period of time to maximise diversification. Not difficult to do if you take a little time to understand what you are investing in. 2, GBBA1 and GEA were withdrawn for totally different reasons to what you infer in your post, and yet again you are trying to paint a picture of deceit and dubious motives by AC that simply do not exist , again total BS on your part. To be clear here, GBBA1 was withdrawn as the interest rates on offer were too low to support the 7% yield of GBBA1, GBBA2 was launched and at launch worked exactly how the old GBBA1 did, GEA was withdrawn due to the limited future supply of green energy loans. Both these discontinued accounts have since benefited from the improved diversification process which operated across all the automated accounts however the limited supply of new loans to these accounts prior to closure did adversly affect their diversification potential. The provision fund is perfectly well understood and documented. To be totally clear for you again here is how it works: - The PF only protects the automated accounts
- With the exception of the QAA and 30 Day access account defaulted loans are not tradeable.
- With the exception of paying late interest on non-defaulted loans for the automated accounts the AC PF only provides discretionary protection for capital loss AFTER all recovery options have been concluded. So there is no protection provided at the point of default and no protection for loss of interest during this recovery process which may take years, typically 2-3 years is not uncommon. Yes this means you have to wait for your money back, it's not like RateSetter!
- The PF is discretionary for legal reasons and has to be operated in this manner. If AC provided a guarantee of protection from loss through the PF this would constitute an insurance product potentially requiring AC to register as an insurance provider and requiring different legal oversight.
- If you think AC is operating it's PF in a dubious or non-standard way I suggest you go and take a look at the other secured loan SME/Property platforms like Lendy and you will see similar arrangments exist there. It is not the same as the personal loans world of RS or Zopa and everyone has to accept that.
AC are not a joke however your statements here are. The detail of how ACs PF works has only come to light over an extended period and certainly wasn't clear to the many here prior to recent clarifications. I don't accept that AC provided any clarity with respect to diversification in the GEIA and I don't think they are providing any clarity around when they will start recovery on the I** loans, one of which has been suspended for over 12 months. Regardless of the reason's that AC have withdrawn products, you might see them as belated good management but I see it as incompetence in their creation of the original products. As to other comments here which dismiss p2p as investments where those involved should know what they are getting into, I think most of us know what the score is. I'm invested in several other platforms and I don't think any of them move the goal posts quite as much as AC whose approach at times seems to be make it up as they go along. When I invested with AC I assumed a level of competence which has been sadly lacking and I'll be glad to be rid of them.
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Post by brightspark on Jul 4, 2018 16:48:44 GMT
loan #227 £6m. Overdue. Interest free extension of 6 months (until September). No foreseeable repayment within extension. Meanwhile, director hands himself a £400k interest free loan with no repayment terms. I would expect AC to give a commentary for this! On the face of it, looks outrageous & shows a total lack of director responsibility. Let's have an investor vote on this one. Option A: Call in the loan with immediate effect including outstanding interest! Option B: Call in the loan with immediate effect including outstanding interest! September is closing fast. Presumably we will have another vote on the way forward. It will be a tough call. I would not want to give any further leeway but on the other hand any administrators will have a long slog to sell the asset and the realised amount may be disappointing. Perhaps okish if you are covered by the provision fund?
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Post by nesako on Jul 5, 2018 12:25:34 GMT
I must have missed this. Is that the total PF at AC or just the bit covering the GEA? Where did you get this from and are the other PF figures out there as well? Thanks Just for the the GEA - just click on the account and it now states the PF size (this is a recent change). Is this still the case? I have been clicking everything everywhere and but cannot see PF size mentioned...
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IFISAcava
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Post by IFISAcava on Jul 5, 2018 12:47:50 GMT
Just for the the GEA - just click on the account and it now states the PF size (this is a recent change). Is this still the case? I have been clicking everything everywhere and but cannot see PF size mentioned... on the GEIA banner, click on "show more" and read to the end
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