sb
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Post by sb on Nov 30, 2019 14:06:55 GMT
My guess is that "unfair contract terms" are handled by a different FCA department, which hopefully is more experienced and more sympathetic to investors. FCA could also be less defensive if all it has to do is make a decision that terms were unfair. It would be much harder to force them to admit an error and get them pay a compensation from their pocket. Will LAG submit a complain to FCA regarding unfair T&Cs? Forget the t&cs, they arent relevant anymore, the waterfall isnt based on the t&cs because there is no priority of repayment after recovery costs, everything ranks equally. The loan contracts are the issue. Principally the fact that Lendy is entitled to a huge default interest payment which has a massive impact on their share of the recovery. The new T&Cs (from March 2018) give Lendy fees/interest the same rank as investor interest. Voiding the waterfall rules will significantly improve our recovery. The fact that default fees accrue to Lendy is also specified in the new T&Cs "13.4. The borrower will pay default fees to Lendy (for its own account) on any overdue amounts under the Loan, as described in the Loan Agreement." Nullifying unfair T&Cs should nullify corresponding terms in Loan Agreements as they are derived from T&Cs. I think our main unfairness complain should be that the waterfall rules allow Lendy claim unjustified and unlimited amounts from recovered money significantly lowering the amount received by investors. Has anyone got a copy of a Loan Agreement (they are called standard loan conditions in the old T&Cs) for a loan part bought before March 2018? Have they modified Loan Agreements after they changed T&Cs? What do they say about Lendy fees and interest?
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11025
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Post by 11025 on Nov 30, 2019 15:39:34 GMT
Lendy's fee for providing enforcement and recovery services to SSSHL is proposed to be 3% per annum of the gross realisations from the date of the default capped at a maximum of 10% of the gross realisations and is considered by the Administrators to be reasonable, proportionate and market standard. It is subject to final approval by the conflict administrator.
So exactly what enforcement and recovery services are being provided ?
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Godanubis
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Post by Godanubis on Nov 30, 2019 16:46:29 GMT
Lendy's fee for providing enforcement and recovery services to SSSHL is proposed to be 3% per annum of the gross realisations from the date of the default capped at a maximum of 10% of the gross realisations and is considered by the Administrators to be reasonable, proportionate and market standard. It is subject to final approval by the conflict administrator. So exactly what enforcement and recovery services are being provided ? They move file from the making good fees to making great fees inbox thanks 😊 . I think there should be accountability with work being done not just put asset up at unrealistic prices and gather fees as it doesn’t sell. Are fees pro rata ? We need oversight and reports from independent assessors into the work being done on each recovery to justify any fee.
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ilmoro
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Post by ilmoro on Nov 30, 2019 17:08:22 GMT
Forget the t&cs, they arent relevant anymore, the waterfall isnt based on the t&cs because there is no priority of repayment after recovery costs, everything ranks equally. The loan contracts are the issue. Principally the fact that Lendy is entitled to a huge default interest payment which has a massive impact on their share of the recovery. The new T&Cs (from March 2018) give Lendy fees/interest the same rank as investor interest. Voiding the waterfall rules will significantly improve our recovery. The fact that default fees accrue to Lendy is also specified in the new T&Cs "13.4. The borrower will pay default fees to Lendy (for its own account) on any overdue amounts under the Loan, as described in the Loan Agreement." Nullifying unfair T&Cs should nullify corresponding terms in Loan Agreements as they are derived from T&Cs. I think our main unfairness complain should be that the waterfall rules allow Lendy claim unjustified and unlimited amounts from recovered money significantly lowering the amount received by investors. Has anyone got a copy of a Loan Agreement (they are called standard loan conditions in the old T&Cs) for a loan part bought before March 2018? Have they modified Loan Agreements after they changed T&Cs? What do they say about Lendy fees and interest? That's an interesting point actually. I have a copy of a loan agreement & it merely states default interest is payable at x percent above the aggregate rate ie Lendy + us. Not who gets it. Will have to read in more depth to see it is referenced elsewhere but I suspect it is in the 'mythical' finance docs which are referenced. No evidence that loan contracts have been amended which could only be done with borrowers consent but the security docs could have been amended if they are between Lendy & SSSH
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ozboy
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Post by ozboy on Nov 30, 2019 17:13:11 GMT
Lendy's fee for providing enforcement and recovery services to SSSHL is proposed to be 3% per annum of the gross realisations from the date of the default capped at a maximum of 10% of the gross realisations and is considered by the Administrators to be reasonable, proportionate and market standard. It is subject to final approval by the conflict administrator. So exactly what enforcement and recovery services are being provided ? They move file from the making good fees to making great fees inbox thanks 😊 . I think there should be accountability with work being done not just put asset up at unrealistic prices and gather fees as it doesn’t sell. Are fees pro rata ? We need oversight and reports from independent assessors into the work being done on each recovery to justify any fee. I have said on here time and again, these vultures need independent oversight/"auditing." Some judge saying s/he will "keep an eye on costs" is as reasuring and effective as the FCA's "consumer protection." It's not for me to put forward the "How" etc, but there is a crystal CLEAR need. Unless you enjoy having a sore bottom. And empty bank account.
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Mucho P2P
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Post by Mucho P2P on Nov 30, 2019 17:46:07 GMT
Does this mean that the administrators are enforcing lendy's Ts & Cs change that most of us rejected? No it means the administrators are attempting to enforce fees owed to Lendy Ltd that were allegedly written directly into the loan security documents/debentures by Lendy when the loans were originated. Essentially the loan/borrower agreements have apparently superseded the platform terms. "The security documents set out an order of priority of payment"This has nothing to do with the platform terms and conditions or any variation of them. The real relevant parts of the terms are: "9.1 The Loan Contract governs the terms of repayment of principal and payment of interest by the borrower."
"9.11 Details of the fees which Lendy charges borrowers are set out in the relevant Loan Contract, and these are, typically, an arrangement fee, an exit fee, and a loan monitoring fee."
Investors have never seen these security documents so won't have had any idea what fees would be contractually due to Lendy Ltd or indeed what their priority would be in the waterfall in this type of scenario although I do believe that one loan agreement may be out there in the public domain somewhere due to a well-publicised court battle to give you an idea. From the way I'm reading it the 3% "fixed" SLA will only be enforced if RSM run out of money from the Lendy Ltd pot to fund the administration having burnt through all the waterfall distributions cash. @monetus, not sure if this has been addressed anywhere, but what services were provided for the "loan monitoring fee"?
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sb
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Post by sb on Nov 30, 2019 17:50:37 GMT
The new T&Cs (from March 2018) give Lendy fees/interest the same rank as investor interest. Voiding the waterfall rules will significantly improve our recovery. The fact that default fees accrue to Lendy is also specified in the new T&Cs "13.4. The borrower will pay default fees to Lendy (for its own account) on any overdue amounts under the Loan, as described in the Loan Agreement." Nullifying unfair T&Cs should nullify corresponding terms in Loan Agreements as they are derived from T&Cs. I think our main unfairness complain should be that the waterfall rules allow Lendy claim unjustified and unlimited amounts from recovered money significantly lowering the amount received by investors. Has anyone got a copy of a Loan Agreement (they are called standard loan conditions in the old T&Cs) for a loan part bought before March 2018? Have they modified Loan Agreements after they changed T&Cs? What do they say about Lendy fees and interest? That's an interesting point actually. I have a copy of a loan agreement & it merely states default interest is payable at x percent above the aggregate rate ie Lendy + us. Not who gets it. Will have to read in more depth to see it is referenced elsewhere but I suspect it is in the 'mythical' finance docs which are referenced. No evidence that loan contracts have been amended which could only be done with borrowers consent but the security docs could have been amended if they are between Lendy & SSSH Two points 1) Finance Documents should be available for us to accept according to T&Cs. That means any documents that we don't have access to are not Finance Documents and we are not bound by them. T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. " 2) It is unlikely Finance Documents say anything about default interest. The Administrators in their example show it to have the same priority as investors and Lendy interest, which implies that default interest cannot be "Finance Documents" fee as it would have had higher priority otherwise. T&Cs 13.3 "first, payment of any unpaid fees, costs and expenses of the Agent under the Finance Documents; second, payment of any accrued interest, fee or commission due but unpaid under the Loan Agreement; "
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rocky1
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Post by rocky1 on Dec 1, 2019 7:12:56 GMT
if all this waterfall business is allowed to run as LB and his lawyers intended it seems that LY ltd in conjunction with sssh both in administration aka LB will have been a very profitable venture and one of the few P2P platforms to have made a profit.the returns that will come in if things stand as they are will make a company in administration millions of pounds of our funds to be distributed amongst shareholders of said failed companies namely LB.there was a video of a interview with LB and Tim posted on here a long time ago where LB said we are very good at it and it seems he was right. could somebody put that back up on here. i can't find it and don't know how to post pics/videos.
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Post by p2plender on Dec 1, 2019 7:47:47 GMT
Brooke's address is well known so perhaps you could ask him directly over a pint? I'm sure he'd pay his way at the bar.
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jaswells
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Post by jaswells on Dec 1, 2019 7:48:54 GMT
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agent69
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Post by agent69 on Dec 1, 2019 9:52:05 GMT
That's an interesting point actually. I have a copy of a loan agreement & it merely states default interest is payable at x percent above the aggregate rate ie Lendy + us. Not who gets it. Will have to read in more depth to see it is referenced elsewhere but I suspect it is in the 'mythical' finance docs which are referenced. No evidence that loan contracts have been amended which could only be done with borrowers consent but the security docs could have been amended if they are between Lendy & SSSH Two points 1) Finance Documents should be available for us to accept according to T&Cs. That means any documents that we don't have access to are not Finance Documents and we are not bound by them.T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. " 2) It is unlikely Finance Documents say anything about default interest. The Administrators in their example show it to have the same priority as investors and Lendy interest, which implies that default interest cannot be "Finance Documents" fee as it would have had higher priority otherwise. T&Cs 13.3 "first, payment of any unpaid fees, costs and expenses of the Agent under the Finance Documents; second, payment of any accrued interest, fee or commission due but unpaid under the Loan Agreement; " What efforts did you make to check the availability of the documents, and what steps did you take to try to access them?
It is commonplace for further information to be available for inspection, but as others elsewhere have found out access is not always made easy - "It was on display in the bottom of a locked filing cabinet, stuck in a disused lavatory with a sign on the door saying Beware of the Leopard”
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sb
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Post by sb on Dec 1, 2019 10:39:04 GMT
Two points 1) Finance Documents should be available for us to accept according to T&Cs. That means any documents that we don't have access to are not Finance Documents and we are not bound by them.T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. " 2) It is unlikely Finance Documents say anything about default interest. The Administrators in their example show it to have the same priority as investors and Lendy interest, which implies that default interest cannot be "Finance Documents" fee as it would have had higher priority otherwise. T&Cs 13.3 "first, payment of any unpaid fees, costs and expenses of the Agent under the Finance Documents; second, payment of any accrued interest, fee or commission due but unpaid under the Loan Agreement; " What efforts did you make to check the availability of the documents, and what steps did you take to try to access them?
It is commonplace for further information to be available for inspection, but as others elsewhere have found out access is not always made easy - "It was on display in the bottom of a locked filing cabinet, stuck in a disused lavatory with a sign on the door saying Beware of the Leopard”
T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. You will be deemed to accept the Loan Contracts, the Finance Documents and these Terms by ticking a box when prompted." Lendy should have provided them at the time they asked us to tick a box. I personally have not saved any documents presented at the time being asked to accept them but others did. Does anyone know what documents were included when asked to accept the Loan Agreement and the Finance Documents?
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adrianc
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Post by adrianc on Dec 1, 2019 11:26:23 GMT
Unfortunately, the fact that Lendy isnt trading is irrelevant, they are still entitled to the money under the existing contracts. The money arising from those contracts is an asset of Ly-in-administration. It's part of the pot that will ultimately go towards distribution to the creditors.
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ilmoro
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Post by ilmoro on Dec 1, 2019 11:43:28 GMT
What efforts did you make to check the availability of the documents, and what steps did you take to try to access them?
It is commonplace for further information to be available for inspection, but as others elsewhere have found out access is not always made easy - "It was on display in the bottom of a locked filing cabinet, stuck in a disused lavatory with a sign on the door saying Beware of the Leopard”
T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. You will be deemed to accept the Loan Contracts, the Finance Documents and these Terms by ticking a box when prompted." Lendy should have provided them at the time they asked us to tick a box. I personally have not saved any documents presented at the time being asked to accept them but others did. Does anyone know what documents were included when asked to accept the Loan Agreement and the Finance Documents? There were no documents but then unless you invested after March 18 those t&cs werent in force. The t&cs operating for most of the period merely asked you to accept the loan conditions for all ongoing lending the first time your lent by ticking a box. Loan conditions are not clearly defined, no reference to contract or finance docs, so could easily have meant the platform t&cs. Some of us did regularly chase visibility of loan contracts with Lendy but made little progress. Most lenders AFAICS didnt, they were getting 12% & didnt care/understand until things went smelly.
There seem to be two problems here
... some, presumably very expensive lawyers with full access to all relevant documentation, have concluded that the waterfall in the most recent t&cs should not be applied in full ... we know that because capital, non-recovery fees, and interest are being treated pari passu rather than interest ranking first. They seem to be basing this on the security documents (ie charges at CH) - application of proceeds clauses - this is actually to lenders benefit compared to the t&cs waterfall as capital is the major quotient of outstanding laibilities
... any claims regarding the t&cs I suspect would only result in a liability against Lendy for investors as unsecured creditors. There is no reference in any t&cs for model 2 loans prior to the March 18 version for priority of payment. There is no priority in the loan contracts (AFAICS). There is no priority in the security docs (AFIACS) There is no reference to default interest & the receipient in t&cs pre March 18, no reference to recipient in loan contract or security docs (AFAICS).
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sb
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Post by sb on Dec 1, 2019 12:41:29 GMT
T&Cs 7.1 "The first time you lend funds you will be required to accept the terms of the Loan Agreement and the Finance Documents for all your on-going lending. You will be deemed to accept the Loan Contracts, the Finance Documents and these Terms by ticking a box when prompted." Lendy should have provided them at the time they asked us to tick a box. I personally have not saved any documents presented at the time being asked to accept them but others did. Does anyone know what documents were included when asked to accept the Loan Agreement and the Finance Documents? There were no documents but then unless you invested after March 18 those t&cs werent in force. The t&cs operating for most of the period merely asked you to accept the loan conditions for all ongoing lending the first time your lent by ticking a box. Loan conditions are not clearly defined, no reference to contract or finance docs, so could easily have meant the platform t&cs. Some of us did regularly chase visibility of loan contracts with Lendy but made little progress. Most lenders AFAICS didnt, they were getting 12% & didnt care/understand until things went smelly.
There seem to be two problems here
... some, presumably very expensive lawyers with full access to all relevant documentation, have concluded that the waterfall in the most recent t&cs should not be applied in full ... we know that because capital, non-recovery fees, and interest are being treated pari passu rather than interest ranking first. They seem to be basing this on the security documents (ie charges at CH) - application of proceeds clauses - this is actually to lenders benefit compared to the t&cs waterfall as capital is the major quotient of outstanding laibilities
... any claims regarding the t&cs I suspect would only result in a liability against Lendy for investors as unsecured creditors. There is no reference in any t&cs for model 2 loans prior to the March 18 version for priority of payment. There is no priority in the loan contracts (AFAICS). There is no priority in the security docs (AFIACS) There is no reference to default interest & the receipient in t&cs pre March 18, no reference to recipient in loan contract or security docs (AFAICS).
1) How did you get copies of Loan Agreements then? I was a sheep following a crowd assuming that if other people invest serious money they check legal docs. My exposure to Lendy is small, a few thousands. 2) I am aware that the previous T&Cs are more vague regarding what constituents a Loan Contract but I think that is even better for us as "fair contract rules" require the documents to be clear and any vague terms would be interpreted in our favour. Asking a customer to sign contract without showing it to him/her is definitely a deceptive tactic. 3) It is possible that the new T&Cs apply to the old contracts as they contain a relevant clause. Not sure what happens if there is a conflict between an existing Loan Contract and the new T&Cs. 4) I've noticed too that the Administrators rank interest/fees and capital equally. T&Cs gives Lendy a discretion to do this so this is not a breach of T&Cs. This discretion about waterfall rules is likely to be an unfair contract term as it allows Lendy to significantly change terms of the contract. 5) I disagree that voiding some unfair contract terms will make us unsecured creditors. This is possible true for loans which has been paid already but it is not true for the future distributions. Even if you are right it improves our position as it looks like there is going to be enough money to get at least a part of what should be ours. 6) I agree that the old T&C don't specify waterfall rules and who gets default interest. Voiding the new unfair T&Cs terms will definitely help with default interest, the biggest Lendy claim on recovered money. In the worst case default interest would be split between us and Lendy, in the best case would be payable to us. 7) what was Lendy standard interest in relation to investors interest? I haven't got any Loan Agreement to check myself. 8) The new T&Cs is a Finance Document itself: "These Terms constitute a Finance Document, as defined in the Loan Contract."
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