Variable T&C - any legal experts out there?

Not IMO although my information may be out of date. It is incumbent upon the company (or indeed an individual) to inform those affected, by e-mail or usually by post of any changes to the T&C's they originally agreed to. Should they not be in agreement then a reasonable exit route must be provided. Think this is covered under the Unfair Contract Terms Act and would certainly fall foul of the FCA.

Simply amending the T&C's on the website without the necessary notifications is not good enough.

Care to name names?

Very interesting you raise this point. We have had our T&C's copied by at least 2 platforms recently. Some points were amended slightly to suit their model but 95% was identical.

We informed one platform and they took their T&C'S down for around 8 months while they tried to get their own drawn up. They did reappear and still look very similar. The other platform we did not contact and went straight to our solicitors who drew ours up, JMW in Manchester. We are currently speaking to them about what can be done about this bearing in mind cost vs benefit.

What worries me most is not the fact they have used our T&C's but without the legal guidance needed in this sector, I worry for lenders capital.

I have also dropped the FCA a note about this. It would be disastrous for the sector if a platform was to 'copy' legal documents from other sites without taking advice themselves. They would have had no real advice on the ongoing changes in regulation that call for T&C's to be amended for lender protection. They would also have no indemnity insurance to call on from their solicitors if an error in their T&C's were to cause a financial loss to lenders or the platform itself.

Worrying to say the least.

I took it that the OP was referring to the reservation of the right to change the Ts&Cs and everything that follows given that such changes are by their nature unilateral. By the way placing the onus on the lender to check the website is not inconsistent with the "Industry Guidance for FCA Banking Conduct of Business Sourcebook"

The quote looks like a textbook example of unfair contract terms.

"Terms which allow firms to unilaterally vary the contract unfairly are the most common type of unfair terms that we come across". A firm is permitted to vary contract terms but is supposed to be giving the reasons why such variations may happen. Those reasons should be specific, not general, and the variations themselves have to be fair.

So far as notice goes, "Firms should ensure contracts are clear and not unfair in relation to how notice of unilateral variations will be given to consumers. Personal notification is likely to contribute to fairness as it is most likely to ensure consumers are aware of the variation. In some cases, for example, a minor variation to bank accounts which have low balances, media or branch notification may be appropriate. However, we would be concerned if consumers were informed of significant variations in this way". So again this appears to be an unfair contract term because it does not constrain the lack of personal notice to only minor changes.

You may want to consider reporting it to the Financial Conduct Authority using their unfair contract terms reporting form. If you make a report be sure to note that this is in relation to P2x lending and that by the nature of that business you can be locked in for ten or more years even if you lend for a month, because if a borrower defaults debt collection could take far longer than the original loan term, with no exit for you until debt collection has finished.

However, unfair terms are still ubiquitous and you might instead find it more appropriate to point the firm to the document below so that they can make the necessary changes before doing it under the direct gaze of the FCA, perhaps seeking guidance from the FCA about whether the revised terms are OK.

If a change is detrimental a consumer normally should have a meaningful right to freely dissolve the contract without paying penalties. Of course that can impossible with P2x due to the binding underlying contracts that may force consumers to stay with the platform, so it's particularly important that platforms do not make unfair changes that could bind people in ways they didn't envision when they entered the original contract. A firm might have to use the original terms until you can freely exit. One way to allow a free exit might be to assume 100% debt collection and offer to pay that to allow an exit, transferring rights to the collected monies to the P2x firm. Much easier for platforms that have funds that reimburse anyway in all cases.

The requirement to give specific reasons is one reason why many banks have been updating their terms, since many did not previously comply with the requirement to give specific reasons.

Beyond all of that is the overall requirement that firms have to treat their customers fairly and even if nothing else specific is breached, something can still be unfair treatment.

To learn more about the FCA's views on unfair contract terms, I suggest starting with the FSA paper "Unfair contract terms: improving standards in consumer contracts". If I recall correctly this is on the list of things that P2x firms which have interim permission and are involved with consumers have to comply with. The earlier quotes are from this document.

Sadly it is still routine for most contracts to have unfair terms and the ubiquity of them can give people the impression that they are OK just because "everyone" is doing it.

The original SS Ts&Cs were ripped wholesale from another site and then butchered so as to make them nonsensical. Their current Ts&Cs are not much better as they do not reflect the current operation of their platform, and they are inconsistent. On the one hand they state borrower loan agreement is with Lendy and the Lender agreement is with SS which tallies with the SS/Lendy statements that investments are actually loans to SS/Lendy and not the purchase of parts of a loan made to the borrower, and the differences between the interest charged and paid and the lack of any charges, but on the other the Ts&Cs read as if the lender is lending to the borrower.

The problem with wanting standard Ts&CS is that no one P2P Platform is the same as another so they need Ts&Cs that reflect the operation of the platform since they form contract between the Lender and the Platform.  

You need to raise your standards chris   :-)

In a prior life when I used to be involved in such things.....I'm pleased to say that I was responsible for the development of a relatively small but perfectly formed piece of software. The team I led was small, and the development effort was probably order of no more than 4-6 man years (its a time ago...memory fades). I did the design (and some of the dev) and led the team. Not a single bug was ever found in it during integration or acceptance test, nor most importantly post deployment. The only bugs that ever occurred were later after changes were made (new requirements - and it was a 'bug' that I had predicted would happen at least 12 months before it came to light, 'cos of incompatible requirements) and I had moved on to other things. Trivial ? In comparison to modern IT systems absolutely, yes, by more than a country mile. But it was real time software (not necessarily trivial) and the lives of ~ 100+ people in each deployment of it in the real world would have been at risk if it had gone pear shaped on the rare occasions it would be called into action. The core of it still in use today, I have good reason to believe, what is probably 20 years later.

But of course its all about appropriateness for the job at hand. Design, code and test 'sufficiently': the latter being a very moveable feast depending on what you are doing.

The 'problem' with P2P is that it all seems so easy to set up a company dealing in that market. Offer generous returns and loan it out to a third party. So IMO there has been a rush into the marketplace - just look at the number of P2P's that have popped up over the past couple of years. You've got to start somewhere and often it's done on a shoestring budget especially with regards to the back office IT. As the business matures then hopefully so will the IT behind it along with regulatory requirements. But often it's a case of simply bolting stuff onto the IT system when it's clearly not robust enough in the first place. Do not underestimate the FCA. They may often be seen as slow off the mark and media driven but once they get their teeth in then effectively the end game is in sight and it's all downhill from there. I've known more than one company that fell foul of the old FSA and whether their motives were good or bad the companies are no longer around today. Basically regulated out of business but looking back at their cavalier approach to regulation I'm not surprised.

There's nothing new in the T&C's world. Everyone has started by taking them from someone else. The art is of course to make sure they are then fully amended and adopted to your own particular business. The regulator will be successful at some stage in sorting out P2P as they have a habit of 'picking on' a sector of the market. No doubt they will get round to P2P sooner or later.