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Post by oppsididitagain on Jul 11, 2018 5:38:37 GMT
Here”s a thought
With so much bad debt on this platform
Who thinks at least 50% of the late fees, which we keep being told have been added to the loans , should be gpaid back to US.
Too many excuses, a soft touch and lack of urgency to recover OUR money , seems that ReBS aren’t too bothered, as they are the people who get the late fees - NOT us
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Post by es2013david on Jul 11, 2018 19:23:03 GMT
Agree, something needs to be done to compensate lenders.
When serial late payers like L******* L** are continually paying one or two months behind, the split of interest and capital repayment should be adjusted with the interest calculated and increased to represent the delay, with the matching reduction in the funds allocated to capital repayment reduced.
This would give us more interest and penalise the borrower by extending the debt period. Maybe then borrowers might see that it pays to pay on time.
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Post by df on Jul 11, 2018 20:32:48 GMT
Agree, something needs to be done to compensate lenders. When serial late payers like L******* L** are continually paying one or two months behind, the split of interest and capital repayment should be adjusted with the interest calculated and increased to represent the delay, with the matching reduction in the funds allocated to capital repayment reduced. This would give us more interest and penalise the borrower by extending the debt period. Maybe then borrowers might see that it pays to pay on time. Lending to SME sector at such high rate one should expect late re-payments and many defaults. These are struggling businesses and in most instances they pay late not because they are not bothered, but because they can't afford it. I don't think ReBS are in position to impose penalising measures on borrowers. And for us - some repayments are better than nothing.
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Post by danraj on Oct 23, 2018 8:40:09 GMT
oppsididitagainI'm amenable to considering this suggestion. We don't make much from late fees, so it would be more of a token gesture. Though I'm unsure of the extent to which it would be appreciated/received. Late fees are notoriously difficult to collect and a lot of the time we waive or discount them. My thoughts on implementing this would be to share 50% of the fee with lenders, possibly by weighting the distribution towards lenders with the lowest Net Return. If you don't mind researching which platforms do this already, I would appreciate it. If you can drop the quipping, I'll gladly explore any good ideas.
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Post by oppsididitagain on Nov 1, 2018 14:14:44 GMT
As far as I know the platforms I invest in don't pass on any late fee's, infact I don't know if they charge any late fees, if they do they don't publicise it as per ReBS.
IMHO - Not only does it annoy the investors (us), as its perceived ReBS are getting cash when we aren't, it' also will only hinder the relationship between the platform and the borrower.
This is why I started the thread, as the amount of outstanding debt on ReBS is truly unacceptable. yet we get E mails saying you are penalising the borrower and we don't get to see any of it.
I'm sure others have their own opinions.
If the SO or DD were all in place and adhered too this late fee conversation wouldn't even have taken place, and I think that is where the problems have started.
The platform has become too soft on borrowers, and outstanding debt has taken far far too long to recover if at all.
It feels like you put the Platform and the borrowers 1st and not US, the community that funds the platform.
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Post by danraj on Nov 1, 2018 16:28:51 GMT
Ok noted. For what its worth, we regularly discount our default fees, so that lenders get a larger share of the enforcement proceeds. I'm sorry if you feel that we put the platform and borrowers first, this isn't the case. The platform trades at breakeven and while we may allow borrowers more time than other platforms who call in loans very quickly, our objective is to intermediate in a way that gives businesses better prospects to recover and service the debt. Sometimes this means supporting under-performing businesses. The majority of our loanbook is performing. There is a 12.2% default rate, yet around 45% of those will recover. It is for this reason that our gross interest rates are higher. After adjusting for bad debt and fees, the average Net Return on the platform is circa 8.9%. It's important to remember that, unlike other platforms, we don't take a margin on the loan, so while lenders assume the risks they also receive the rewards. Being wise about the loans you pick can help you earn a healthy passive income. Read about how one of our most prolific lenders achieves this here: www.rebuildingsociety.com/investing-money/ |
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Post by oppsididitagain on Nov 1, 2018 17:24:16 GMT
Thanks for the quick response, and please take on board what the community is saying.
I have plenty more gripes about ReBS and I may well start some more threads as this is a forum for discussion, the main one being the total lack of updates and proactiveness, compared to other P2P sites, in getting our money back.
FYI - The bad debt number you state , is very misleading and doesn't seem to correlate to my loan book. I have been with you since early 2013, currently I have 18 loans written off as bad debt and another 20 loans in default. Of the 18 loans written off I think ReBS has managed to recover some money on 2 of them. Also with in these 18, I think 3 loans didn't even make 3 monthly repayments and were written off with no chance of a recovery.
So thats 38 loans that aren't performing, I read all the info provided at the time of application and the security on offer etc. yet with most of these loans the information turned out to be false. We have loans with PGI yet no one has made a claim on this to recover funds, we have had businesses being sold without ReBS knowledge, a Husband and wife that have forged signatures. ! Most of the loans came from an introducing broker, which I presume you paid a fee too, yet you don't seem to want to make a claim against the broker for false information.
So as you can imagine the negativity is strong at the moment.
For me to be positive and reinvest, ReBS would need to show a proactive approach in a recovery of funds, demanding money via DD or SO and looking at the companies assets stated on the loan appliaction and making claims against them.
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Post by danraj on Nov 1, 2018 18:07:09 GMT
I appreciate the message. We have recently trained our customer support staff to be more active with engaging lenders on the forums in relation to defaults.
Also, in future, we will be calling lenders who sustain their first default and explaining that the recovery process can take years depending on the type of security offered.
Unfortunately, the legal process is slow and doesn't lend itself to the online world. I understand how the absence of an update can be perceived that nothing is happening, but we recently hired the ex Chief Risk Officer of Ferratum bank, who is helping us apply pressure to our recovery suppliers. So there are some performance improvements, albeit minor.
All borrowers are setup on DDs as standard and we plan to use Open Banking in 2019.
In recent meetings, we have discussed sharpening our proposition for better quality businesses, who are less likely to default. Lending to these borrowers will require the willingness of lenders to lent at rates below 10%. This area of the market is highly competitive and well served by banks.
While we can't eliminate the defaults or overhaul the recovery success rate, we can ensure that lenders get the rewards of performing loans. Many other financial intermediaries take a significant margin, whereas we pass this on.
I don't know if you have been active in recent years, but I can tell you that those lenders who have stuck with us have successfully compounded the returns they gained. I appreciate the much of the profit can be wiped out by bad debt and that recoveries are important, but the truth is that similar risks exist on other platforms who don't price for it.
While the industry is maturing, I would ask you to give us another try. We are into a 5th iteration of our credit risk analysis model and we are looking to improve it all the time.
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