TenKay
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Post by TenKay on Jun 27, 2018 7:00:10 GMT
COL Lessons learnt for other P2P portals
1) I'd hope that other Directors do not "take home" assets
2) Core data files have been recovered but not from the IT consultant but from his subcontractor which might have been wiped due to non payment of fees. It would seem that something needs to change for all portals with all data being safely held in house not subcontracted by a subcontractor.
3) It seems like many of the borrowers have just walked away from paying their dues, again something needs to be done to ensure that does not happen in any other P2P failure
the FCA needs to change its rules to sort this out and I hope that other, live P2P portals can confirm that they would not be in this mess
2) Reading between the lines, the contractor (a) hasn't been paid; (b) has lost his best income stream; and (c) knows he is sitting on something worth a lot. Unless he's a complete idiot nothing has been "wiped". The lawyers have threatened him and he's provided the raw data, but the full transactional history cannot be extracted without the code. The code is his IP and he's not going to give it up lightly (cheaply) but BDO are not in a position to pay for it. BDO will be deciding whether they can achieve a "satisfactory" outcome with the data they've got. All supposition of course. 3) Most of them can't just walk away, there are charges on the property or bling in storage. They might take the opportunity for a payment holiday (I'm not sure if these loans were upfront loaded/monthly/bullet). 3) not as learned as most folk on here, but i thought if there was a charge over a property it would remain until it was discharged. so to just walk away would leave the property owners in a position of not being able to do anything with the property
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Post by Deleted on Jun 27, 2018 8:26:50 GMT
Thanks for the feedback, I was more concerned that these potential errors were managed in other portals.
The failing to pay outstanding interest is more "interesting" Mrs bobo is a lawyer and points out that loans/contracts often have punishment interest rates if interest is not paid on time. So some borrowers may have drifted into these punishment rates, which an administrator might try to chase. Any borrower in trouble might well take advantage of this lack of observation to help their cash flow which may improve the opportunity for the deal to work out. All interesting issues.
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Post by dan1 on Jun 27, 2018 10:05:21 GMT
Extracted from Appendix 3
The only loan we know to have refinanced is the Bromyard loan on FS.
The loan was for £210,000 on Collateral and according to my records last updated on 25 Feb the loan had 87 days remaining, which would place the end date at 23 May 2018. The loan went live on FS on 13 Jun, so we can deduce it was repaid 21 days late.
Interest of £2,174.76 equates to 18% interest rate for 21 days. Non-preferential lenders invested on terms of 12% interest.
My guess is that borrowers were charged 18% (i.e. 1.5% per month) leaving the platform with 6% margin (from which they had to pay interest/cashback over and above 12% to preferential lenders).
Edit: It would appear that in this instance no default interest rate was charged to the Bromyard borrower (not unreasonable given 21 days late is nothing for bridging/development loans, not an unreasonable tolerance period) nor any fees for repayment of the loan.
Edit 2: interest/fees for the original term were paid upfront
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withnell
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Post by withnell on Jun 27, 2018 13:54:33 GMT
While it definitely needs pursuing, hopefully the administrators will focus on the recovery from loans of the c.97% of the loan book that has been identified (and distribute those funds to investors) rather than locking funds up for months going after the missing c.3%
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archie
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Post by archie on Jun 28, 2018 10:46:21 GMT
The 27th June FAQ is now on the website. |
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agent69
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Post by agent69 on Jun 28, 2018 18:03:23 GMT
The 27th June FAQ is now on the website. Nothing of any great interest.
Only point that could have done with a proper answer (what happens if more than 5 people are nominated to the cc) has been fudged by saying a process will be undertaken to determine who gets the gig
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agent69
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Post by agent69 on Jun 28, 2018 18:14:40 GMT
Please let's be CLEAR ; IT'S VALUE FOR MONEY THAT MATTERS,
You are quite correct, but the problem is we will never know whether we've had value for money or not. What BDO charge and what they recover will become matters of fact in the fullness of time, but we will never have anything to compare it with.
It has been said many times before that people are investing in P2P without understanding the risk. I suspect some of these have put a stash in COL and are now looking for somebody else to blame for their current predicament. For many kicking BDO is a lot easier than just admitting that they didn't know what they were getting into.
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blender
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Post by blender on Jun 28, 2018 19:22:33 GMT
Please let's be CLEAR ; IT'S VALUE FOR MONEY THAT MATTERS,
You are quite correct, but the problem is we will never know whether we've had value for money or not. What BDO charge and what they recover will become matters of fact in the fullness of time, but we will never have anything to compare it with.
It has been said many times before that people are investing in P2P without understanding the risk. I suspect some of these have put a stash in COL and are now looking for somebody else to blame for their current predicament. For many kicking BDO is a lot easier than just admitting that they didn't know what they were getting into.
Most unfair to Coll lenders. They understood the risk in the loans. They understood the business risk in the platform. How could they possibly have known that a platform which was listed as registered, and thought it was registered and said it was registered, would be driven to insolvency solely because in fact it was not registered? Lenders made no errors of judgement, and are right to blame someone else. How are lenders possibly to blame? What should they have known? I am not a lender, but could easily have been. This idea from FCA that they did not need to stop trading because they could have continued the unregulated activity, just sheer buck-passing.
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adrianc
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Post by adrianc on Jun 28, 2018 20:39:48 GMT
Since COL when into adminstration at the end of FEB. Are we not entitled to claim FEB's interest ? Or is that being too greedy.  Interest is paid at the very end of Feb. The company went into administration on 28th. If interest hadn't been paid by the time the adminstration shutters went up, it was outside of the scope of the trust account - because that's basically a snapshot at the time they were called in. Everything after that is a separate question, one of being a creditor of the business. I continue to be disappointed that the BDO bashers continue to have a pop (not going fast enough, too expensive, won't achieve 100% recovery, haven't paid any money back yet.). Given the scorched earth policy adopted by Col during their retreat, BDO's progress too date appears more than reasonable. So we all just have to sit tight until the data retrieval issue is sorted and then we will see if it's individual pots for all, or if we are all in the same boat, in the same creek without a paddle. You really can't be serious; cut & paste the RR report, recover a measly £212k out of £17M, secure the servers (but still not reconstructed the loanbook)...
Oh, come on. Just look at the timeline. 28/2 - Refresh appointed, shutters go up. (Sec 2, para 4 of 21/6 report)
15/3 - FCO object to Refresh appointment. (Sec 2, para 5 of 21/6 report) "During March" - Servers decommissioned due to non-payment (Sec 5.5 of 21/6 report)
27/4 - BDO appointed. (Sec 2, para 6 of 21/6 report) So how, exactly, is this BDO's fault - or even, come to that, the FCA's? Surely one of Refresh's first actions should have been to make sure all off-site data was stored securely? Yet "Both the directors and Mr Craig advised that they had no access to the electronic platform, nor any back-up of the data contained within it" - so who the flying wossit did, and why the flying wossit didn't they?
In addition, the servers decommissioned due to non-payment within a month of administration? This suggests Collateral was already in arrears. Servers don't get decommissioned the minute the first bill is overdue by a day or even a week. Also from Sec 5.5... So BDO sound like they're doing their damndest to get this info together... but, again, why do they NEED to? Simple - because of (at best) incompetence by Refresh in failing to secure it immediately, but primarily by Col themselves in not having any kind of secured backup available. If our positions were all securely backed up by Col, even if they were a few days out-of-date, this would be a non-issue. It also means (Sec 8) that the loan book cannot be sold, simply because nobody actually has it.
The penultimate para of Sec 5.6 says it all, tbh. What the...?!? How lax were the Curries treating this whole thing...?
No wonder Refresh's fees have been ordered to be repaid (and have been!) - Sec 5.8.
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shimself
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Post by shimself on Jun 29, 2018 7:16:04 GMT
Thanks for the feedback, I was more concerned that these potential errors were managed in other portals.
The failing to pay outstanding interest is more "interesting" Mrs bobo is a lawyer and points out that loans/contracts often have punishment interest rates if interest is not paid on time. So some borrowers may have drifted into these punishment rates, which an administrator might try to chase. Any borrower in trouble might well take advantage of this lack of observation to help their cash flow which may improve the opportunity for the deal to work out. All interesting issues.
In general terms, skipping a payment contributes nothing to profit (as interest rates are, as we all know, extremely low). Just occasionally a business might actually be helped over a cashflow hiccup by skipping a payment, but other than that if the payment is not made, the only sensible thing to do is to earmark the money. Habitually skipping the payment and using the money elsewhere is a recipe for disaster.
Having said which if it were my business and if I was wondering if the legal agreement might be defective to the point that I may not have to pay, and if I were a thieving git unscrupulous, I might then withold payments.
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agent69
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Post by agent69 on Jun 29, 2018 8:20:10 GMT
Most unfair to Coll lenders. They understood the risk in the loans. They understood the business risk in the platform. How could they possibly have known that a platform which was listed as registered, and thought it was registered and said it was registered, would be driven to insolvency solely because in fact it was not registered?
I think this is covered by the Donald Rumsfeld scenario, He said "there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know".
I think this could apply to risks in P2P lending. The consequences of platform failure are a known unknown, but there are a hundred and one unknown unknowns out there waiting to bite you on the bum (a typical example of this second category being some tw*t not bothering to make a back up of critical data). I don't buy into the blinkered view that it's only the known unknowns that you should worry about.
The capacity of the P2P industry to dump on investors from great height knows no bounds. Invest at your peril.
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Post by dan1 on Jun 29, 2018 8:23:47 GMT
Most unfair to Coll lenders. They understood the risk in the loans. They understood the business risk in the platform. How could they possibly have known that a platform which was listed as registered, and thought it was registered and said it was registered, would be driven to insolvency solely because in fact it was not registered?
I think this is covered by the Donald Rumsfeld scenario, He said "there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know".
I think this could apply to risks in P2P lending. The consequences of platform failure are a known unknown, but there are a hundred and one unknown unknowns out there waiting to bite you on the bum (a typical example of this second category being some tw*t not bothering to make a back up of critical data). I don't buy into the blinkered view that it's only the known unknowns that you should worry about.
The capacity of the P2P industry to dump on investors from great height knows no bounds. Invest at your peril.
hear, hear
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jlend
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Post by jlend on Jun 29, 2018 8:35:45 GMT
Organisations love taking extracts from databases and putting the data into Excel so they can create pretty things with pivot table and graphs for meetings etc.
I am surprised the owners of COL didn't do this for the lender/borrow split stored in the database.
I would have thought they could lay their hands on a file or printout somewhere.... even if it was a little out of date....
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shimself
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Post by shimself on Jun 29, 2018 14:47:09 GMT
Organisations love taking extracts from databases and putting the data into Excel so they can create pretty things with pivot table and graphs for meetings etc. I am surprised the owners of COL didn't do this for the lender/borrow split stored in the database. I would have thought they could lay their hands on a file or printout somewhere.... even if it was a little out of date.... My guess is that confidentiality laws make that a lot harder than it used to be. Remember when they start using that as an excuse that they have to have said it before 15:46 on June 29 (But, it may harm your defence if you do not mention when questioned something which you later rely on in court)
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moist
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Post by moist on Jun 29, 2018 15:01:01 GMT
long way to go yet, but I suspect a lot of money loaned to mates on overvalued sites that will just default.....lets see.
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