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Post by geosaddler on May 22, 2019 10:47:07 GMT
So I started investing in FC early last year and like most newbies I suspect was drawn to the headline interest, good interface and ease of investing. I sat back, relaxed and watched the 'interest earned' increase. The defaults then began (several before even 1 payment was made) which started to concern me but as long interest was positive I carried on. (this dropped from approx 7% to 5.2%).....then came the important part.....I discovered the 'sell' button! I've checked this regularly and the amount available to sell has ranged from 88% to 91% of my portfolio total which is still less than my invested amount!
I then decided to sell a chunk off to see what happens. After 49 days of waiting I received only 62% of the requested amount! Enough is enough and I've now decided to sell everything off (only 91% of portfolio total available to sell this time). At this rate it could take hundreds of days to sell off an amount that will probably end up being considerably less than I invested.
I'm just checking what everybody else's experience is with this and to warn any other newbies to not be drawn in by 'interest earned'. It is only ever real genuine profit when it lands back in your bank account and this is going to be a slow and painful process just to lose money. Is anybody making money from FC currently?
End of mini rant. Ratesetter seems pretty boring (boring is good in P2P) and with a provision fund so I think it's time to send the FC money over there...when I eventually get it!
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r00lish67
Member of DD Central
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Post by r00lish67 on May 22, 2019 10:58:30 GMT
So I started investing in FC early last year and like most newbies I suspect was drawn to the headline interest, good interface and ease of investing. I sat back, relaxed and watched the 'interest earned' increase. The defaults then began (several before even 1 payment was made) which started to concern me but as long interest was positive I carried on. (this dropped from approx 7% to 5.2%).....then came the important part.....I discovered the 'sell' button! I've checked this regularly and the amount available to sell has ranged from 88% to 91% of my portfolio total which is still less than my invested amount!
I then decided to sell a chunk off to see what happens. After 49 days of waiting I received only 62% of the requested amount! Enough is enough and I've now decided to sell everything off (only 91% of portfolio total available to sell this time). At this rate it could take hundreds of days to sell off an amount that will probably end up being considerably less than I invested.
I'm just checking what everybody else's experience is with this and to warn any other newbies to not be drawn in by 'interest earned'. It is only ever real genuine profit when it lands back in your bank account and this is going to be a slow and painful process just to lose money. Is anybody making money from FC currently?
End of mini rant. Ratesetter seems pretty boring (boring is good in P2P) and with a provision fund so I think it's time to send the FC money over there...when I eventually get it!
Bugger, just lost a whole massive reply to you with some webserver issue. In short, yes you're right. FC are aware that their stats are misleading, but continue to do it anyway, and will probably do it until the press catch wind of it. The consolation for you geosaddler is that some (maybe half?) of that 12% locked cash may unrelease itself at some stage with no ill effect. The other portion will eventually default. Recoveries are reasonably good at FC, in the range of 40-60%. You will receive that though in dribs and drabs over the next few years. And yes, this is exactly why I prefer platforms like RS, LW, GS + Assetz QAA too.
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ashtondav
Member of DD Central
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Post by ashtondav on May 22, 2019 14:39:29 GMT
There is over $10 trillion of government debt worldwide on negative interest rates. Yes, lending to the German government over the next ten years will earn you less than putting it under the mattress. Yep, not less than inflation, but absolutely less. -0.084% pa to be precise.
These are torrid times....
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Post by geosaddler on May 23, 2019 8:48:42 GMT
So I started investing in FC early last year and like most newbies I suspect was drawn to the headline interest, good interface and ease of investing. I sat back, relaxed and watched the 'interest earned' increase. The defaults then began (several before even 1 payment was made) which started to concern me but as long interest was positive I carried on. (this dropped from approx 7% to 5.2%).....then came the important part.....I discovered the 'sell' button! I've checked this regularly and the amount available to sell has ranged from 88% to 91% of my portfolio total which is still less than my invested amount!
I then decided to sell a chunk off to see what happens. After 49 days of waiting I received only 62% of the requested amount! Enough is enough and I've now decided to sell everything off (only 91% of portfolio total available to sell this time). At this rate it could take hundreds of days to sell off an amount that will probably end up being considerably less than I invested.
I'm just checking what everybody else's experience is with this and to warn any other newbies to not be drawn in by 'interest earned'. It is only ever real genuine profit when it lands back in your bank account and this is going to be a slow and painful process just to lose money. Is anybody making money from FC currently?
End of mini rant. Ratesetter seems pretty boring (boring is good in P2P) and with a provision fund so I think it's time to send the FC money over there...when I eventually get it!
Bugger, just lost a whole massive reply to you with some webserver issue. In short, yes you're right. FC are aware that their stats are misleading, but continue to do it anyway, and will probably do it until the press catch wind of it. The consolation for you geosaddler is that some (maybe half?) of that 12% locked cash may unrelease itself at some stage with no ill effect. The other portion will eventually default. Recoveries are reasonably good at FC, in the range of 40-60%. You will receive that though in dribs and drabs over the next few years. And yes, this is exactly why I prefer platforms like RS, LW, GS + Assetz QAA too. Thanks for the reply. Standard P2P market volatility I can accept but the key word you have used there is that the stats are 'misleading'. If you can get a lucky portfolio then I can imagine a theoretical profit can be made. That's the problem though it is theoretical money and even that total is decreasing with the ever increasing defaults. I wonder how many FC customers are enjoying the 'interest earned' figure and have yet to attempt any degree of sell. They are in for a disappointing surprise when they try to get their money.
I'm out. Over to RS or may give AC a whirl if the reading sounds promising.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on May 23, 2019 9:16:25 GMT
Bugger, just lost a whole massive reply to you with some webserver issue. In short, yes you're right. FC are aware that their stats are misleading, but continue to do it anyway, and will probably do it until the press catch wind of it. The consolation for you geosaddler is that some (maybe half?) of that 12% locked cash may unrelease itself at some stage with no ill effect. The other portion will eventually default. Recoveries are reasonably good at FC, in the range of 40-60%. You will receive that though in dribs and drabs over the next few years. And yes, this is exactly why I prefer platforms like RS, LW, GS + Assetz QAA too. Thanks for the reply. Standard P2P market volatility I can accept but the key word you have used there is that the stats are 'misleading'. If you can get a lucky portfolio then I can imagine a theoretical profit can be made. That's the problem though it is theoretical money and even that total is decreasing with the ever increasing defaults. I wonder how many FC customers are enjoying the 'interest earned' figure and have yet to attempt any degree of sell. They are in for a disappointing surprise when they try to get their money.
I'm out. Over to RS or may give AC a whirl if the reading sounds promising.
Give Welendus a go. No defaults are held by investors they are bought by their provision fund. Their max individual loan is tiny so your individual exposure is minuscule. There can be a lag in getting funds invested but overall it gives a reasonable monthly return.
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p2pete
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Post by p2pete on May 23, 2019 9:26:34 GMT
If you can get a lucky portfolio then I can imagine a theoretical profit can be made. That's what FC themselves say too. If you complain about returns they say you've been particularly unlucky. Since it's a passive platform we have no choice in the loans we invest in, and returns are dependent only on luck. In other words it's gambling not investing. It would be interesting to see the Gambling Commission's view on whether this model constitutes gambling or investing. The GC have said: A betting intermediary facilitates betting between two or more parties. They do not have liability for the bets but often take a commission fee from the winner. Betting intermediaries can be remote or non-remote. Meanwhile the FCA have said: Where a Discretionary P2P platform advertises a target rate that it is trying to achieve within certain risk parameters, the P2P platform needs to understand not just individual loans, but also how the portfolio of loans that is allocated to an individual investor behaves as whole. Otherwise, it has no assurance that the advertised target rate of returns and risk parameters can be reasonably achieved for that investor. Investors will suffer harm if platforms cannot, within a reasonable degree of confidence, deliver in practice the returns advertised to investors when they made their initial decision to invest. So FC don't meet the FCA definition of passive investing. Passive platforms like AC Access Accounts, RS and LW simply pay the advertised rates under normal conditions. The returns at FC appear to be luck based, as the platform does not seem to have the functionality to allocate loans in such a way to bring each individual investor closer to the average. They are just taking an average of all loans and quoting that as the expected return. In my opinion it's been caused by switching from a fully manual platform to a fully passive platform without actually rewriting anything to meet the FCA's requirements.
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dorset
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Post by dorset on May 23, 2019 13:12:17 GMT
The last point is well made.
The answer lies in the FC stats pages and in particular the chart showing the default profile over time.
The years 2012 thro to 2015 show a very similar profile (these are the years when I was making a consistent 7% plus pa). 2016 is showing a much steeper early default profile while 2017 defaults are taking off like a rocket.
This is very much in keeping with my own defaults - small capital loss so far in 2019 and 41 defaults in the year to date.
The years in which the 2016 and 2017 loans were written were relatively benign in economic terms. IMO the only explanation for the change in these years was a significant relaxation of the FC lending criteria and associated DD. No real stats on 2018 so far. If 2018 follows the proceeding two years then cannot see how anyone is going to make a positive return from FC.
At some point this is going to be picked up by the financial media and then wait for the complaints.
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Post by Ace on May 23, 2019 14:51:22 GMT
Bugger, just lost a whole massive reply to you with some webserver issue. In short, yes you're right. FC are aware that their stats are misleading, but continue to do it anyway, and will probably do it until the press catch wind of it. The consolation for you geosaddler is that some (maybe half?) of that 12% locked cash may unrelease itself at some stage with no ill effect. The other portion will eventually default. Recoveries are reasonably good at FC, in the range of 40-60%. You will receive that though in dribs and drabs over the next few years. And yes, this is exactly why I prefer platforms like RS, LW, GS + Assetz QAA too. Thanks for the reply. Standard P2P market volatility I can accept but the key word you have used there is that the stats are 'misleading'. If you can get a lucky portfolio then I can imagine a theoretical profit can be made. That's the problem though it is theoretical money and even that total is decreasing with the ever increasing defaults. I wonder how many FC customers are enjoying the 'interest earned' figure and have yet to attempt any degree of sell. They are in for a disappointing surprise when they try to get their money.
I'm out. Over to RS or may give AC a whirl if the reading sounds promising.
I don't blame for trying to escape FC, you'll have lots of company on this forum, me included. I'm not sure about RS as a decent alternative. I'm pulling out of there too, partly due to the falling PF coverage and partly due to only achieving an XIRR in the low 4% range in over a year on the 5 year market (this could be due to my own incompetence as I may have waited too long to try and get the 6% + loans). All in all, to too much hassle for too low returns for me. I wish I could second the Welendus vote from the God, as I'm a small equity investor there. Unfortunately loans seem to have almost totally dried up for me recently. I believe early investors are still getting good returns as they are favoured in loan allocations, but think it's worth waiting for improvements before sending any new money in their direction. I'd second the recommendations for LW, GS (particularly if you qualify for their new investor referral), and Assetz. I think they satisfy your 'boring but good' requirement). I would also throw CrowdProperty in the mix if you like first charge property secured loans, and Unbolted as an outsider if you fancy a bit of pawn. Good luck.
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Stonk
Stonking
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Post by Stonk on May 24, 2019 8:21:42 GMT
If you can get a lucky portfolio then I can imagine a theoretical profit can be made. That's what FC themselves say too. If you complain about returns they say you've been particularly unlucky. Since it's a passive platform we have no choice in the loans we invest in, and returns are dependent only on luck. In other words it's gambling not investing. It would be interesting to see the Gambling Commission's view on whether this model constitutes gambling or investing. The GC have said: A betting intermediary facilitates betting between two or more parties. They do not have liability for the bets but often take a commission fee from the winner. Betting intermediaries can be remote or non-remote. Meanwhile the FCA have said: Where a Discretionary P2P platform advertises a target rate that it is trying to achieve within certain risk parameters, the P2P platform needs to understand not just individual loans, but also how the portfolio of loans that is allocated to an individual investor behaves as whole. Otherwise, it has no assurance that the advertised target rate of returns and risk parameters can be reasonably achieved for that investor. Investors will suffer harm if platforms cannot, within a reasonable degree of confidence, deliver in practice the returns advertised to investors when they made their initial decision to invest. So FC don't meet the FCA definition of passive investing. Passive platforms like AC Access Accounts, RS and LW simply pay the advertised rates under normal conditions. The returns at FC appear to be luck based, as the platform does not seem to have the functionality to allocate loans in such a way to bring each individual investor closer to the average. They are just taking an average of all loans and quoting that as the expected return. In my opinion it's been caused by switching from a fully manual platform to a fully passive platform without actually rewriting anything to meet the FCA's requirements.
This is an exceptionally good point.
After the PPI claims deadline passes, those firms chasing PPI payments for people will need to find alternatives, and I imagine P2P is a prime target.
I have already heard radio adverts from them saying if you were sold any investment by banks and it went down in value (even if you were warned, as they have been very careful to do for many years), you could claim compensation. It seems highly dubious, and I sincerely hope the banks won't roll over and cough up like they did with PPI, but I do believe the case against some P2P platforms is considerably stronger. I, for example, was told 7.5% by FC for the black-box hands-off approach and shown graphs of how almost everyone is within a couple of percent of that, and yet I have achieved 0.4%. I need hardly say that is not reasonable. And, yes, precisely, their explanation of why this has happened to me equates very closely to "it was a gamble over whose outcome you had no control".
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ashtondav
Member of DD Central
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Post by ashtondav on May 24, 2019 9:19:26 GMT
That's what FC themselves say too. If you complain about returns they say you've been particularly unlucky. Since it's a passive platform we have no choice in the loans we invest in, and returns are dependent only on luck. In other words it's gambling not investing. It would be interesting to see the Gambling Commission's view on whether this model constitutes gambling or investing. The GC have said: A betting intermediary facilitates betting between two or more parties. They do not have liability for the bets but often take a commission fee from the winner. Betting intermediaries can be remote or non-remote. Meanwhile the FCA have said: Where a Discretionary P2P platform advertises a target rate that it is trying to achieve within certain risk parameters, the P2P platform needs to understand not just individual loans, but also how the portfolio of loans that is allocated to an individual investor behaves as whole. Otherwise, it has no assurance that the advertised target rate of returns and risk parameters can be reasonably achieved for that investor. Investors will suffer harm if platforms cannot, within a reasonable degree of confidence, deliver in practice the returns advertised to investors when they made their initial decision to invest. So FC don't meet the FCA definition of passive investing. Passive platforms like AC Access Accounts, RS and LW simply pay the advertised rates under normal conditions. The returns at FC appear to be luck based, as the platform does not seem to have the functionality to allocate loans in such a way to bring each individual investor closer to the average. They are just taking an average of all loans and quoting that as the expected return. In my opinion it's been caused by switching from a fully manual platform to a fully passive platform without actually rewriting anything to meet the FCA's requirements.
This is an exceptionally good point.
After the PPI claims deadline passes, those firms chasing PPI payments for people will need to find alternatives, and I imagine P2P is a prime target.
I have already heard radio adverts from them saying if you were sold any investment by banks and it went down in value (even if you were warned, as they have been very careful to do for many years), you could claim compensation. It seems highly dubious, and I sincerely hope the banks won't roll over and cough up like they did with PPI, but I do believe the case against some P2P platforms is considerably stronger. I, for example, was told 7.5% by FC for the black-box hands-off approach and shown graphs of how almost everyone is within a couple of percent of that, and yet I have achieved 0.4%. I need hardly say that is not reasonable. And, yes, precisely, their explanation of why this has happened to me equates very closely to "it was a gamble over whose outcome you had no control".
Stonk, was that return over the 18 months since 2017? Or did you withdraw/sell out early. I ask because although I have not achieved 7% I am currently on 6% annualised interest and 8% loans unsellable. That will still, probably, result in a much higher ( tho lower than estimated) return over the five year cycle. So far I have not sold or withdrawn and simply re-invested. I just cannot see how returns are so variable. On the other hand I have seen no evidence of re running the stress test under the new return assumptions. Are low returns a function of selling out, or withdrawing early, therefore leaving the holder with a substandard & deteriorating loan portfolio?
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benaj
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Post by benaj on May 24, 2019 11:12:53 GMT
This is an exceptionally good point.
After the PPI claims deadline passes, those firms chasing PPI payments for people will need to find alternatives, and I imagine P2P is a prime target.
I have already heard radio adverts from them saying if you were sold any investment by banks and it went down in value (even if you were warned, as they have been very careful to do for many years), you could claim compensation. It seems highly dubious, and I sincerely hope the banks won't roll over and cough up like they did with PPI, but I do believe the case against some P2P platforms is considerably stronger. I, for example, was told 7.5% by FC for the black-box hands-off approach and shown graphs of how almost everyone is within a couple of percent of that, and yet I have achieved 0.4%. I need hardly say that is not reasonable. And, yes, precisely, their explanation of why this has happened to me equates very closely to "it was a gamble over whose outcome you had no control".
Stonk, was that return over the 18 months since 2017? Or did you withdraw/sell out early. I ask because although I have not achieved 7% I am currently on 6% annualised interest and 8% loans unsellable. That will still, probably, result in a much higher ( tho lower than estimated) return over the five year cycle. So far I have not sold or withdrawn and simply re-invested. I just cannot see how returns are so variable. On the other hand I have seen no evidence of re running the stress test under the new return assumptions. Are low returns a function of selling out, or withdrawing early, therefore leaving the holder with a substandard & deteriorating loan portfolio? So handsoff achieved 0.4%, and other strategy achieve 8.3% Stonk?
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Post by befuddled on May 24, 2019 12:12:48 GMT
I dipped toe in water of FC mid mid 2017 with about £5k, this shows my experience with them... am now exiting as fast as I can, and put this down to a failed experiment. I am no economist, but on earnings of £406, lost to debt £199 and £250 unable to sell, I fail to see how the interest rate on my summary page is meaningful... I appreciate my sums are not large, and I feel for those who are more invested, especially those who entered last year if their experiences match mine..... ![]() [  
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Post by passiveinvestor on May 25, 2019 11:37:40 GMT
This is exactly my experience. Lent £5,000 last September but after increasing late payers and bad debt decided to sell out. Each sale takes 6 weeks and you get to sell about 75% (late payers and bad debt can’t be sold at all and other loans get caught ‘in processing’. I reckon that after 6 months of selling I will just get my money back.
To add insult to injury I pay tax on interest and because most of the bad debt was declared on 6 April I will have to pay tax on interest I will never receive and then claim it back next year. FC should be avoided at all costs.
I urge anyone who feels the same to give FC a 1 star rating on Trust Pilot. It takes 5 mins and may help others.
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Stonk
Stonking
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Post by Stonk on May 25, 2019 12:25:47 GMT
Stonk, was that return over the 18 months since 2017? Or did you withdraw/sell out early. I ask because although I have not achieved 7% I am currently on 6% annualised interest and 8% loans unsellable. That will still, probably, result in a much higher ( tho lower than estimated) return over the five year cycle. So far I have not sold or withdrawn and simply re-invested. I just cannot see how returns are so variable. On the other hand I have seen no evidence of re running the stress test under the new return assumptions. Are low returns a function of selling out, or withdrawing early, therefore leaving the holder with a substandard & deteriorating loan portfolio? So handsoff achieved 0.4%, and other strategy achieve 8.3% Stonk ?
Exactly.
I had an existing FC portfolio prior to Black Box Day (18 September 2017). Since that date, I have done nothing with it other than withdraw repayments. I can't remember whether the anticipated return when I bought that portfolio was 7% or 7.5%, but it has suffered ridiculous levels of defaults and its XIRR (annually) is 0.4% since Black Box Day. It's been close to that figure for ages: every time it seems like improving -- if I'm lucky it sometimes edges up towards 1% -- I suffer another default to drag it back down again!
In April 2018, I started a new account where I gamed the system to actively acquire brand new loans and sold the whole lot every 2 months. This achieved XIRR 8.3%.
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p2pete
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Post by p2pete on May 26, 2019 8:38:17 GMT
I ask because although I have not achieved 7% I am currently on 6% annualised interest and 8% loans unsellable. That will still, probably, result in a much higher ( tho lower than estimated) return over the five year cycle. The unsellable loans will default. You need to subtract the unsellable amount from your net earnings to understand your current position. You will also get back about 50% of defaults eventually but it's a slow process.
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