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Post by scepticalinvestor on Sept 15, 2019 14:48:57 GMT
Final response to my complaint received today from Emma R No compensation offered and I am now considering to take the complaint to the financial ombudsman service Does anyone have experience of them? I understand they may take years to decide on a case? Clearly PP will put forward arguments that the fees were justified. Would anyone be willing to share the list of arguments they will put forward to the ombudsman to counter the PP view? One thing I am concerned about is however if PP loose..then maybe they do Indeed go bankrupt and the properties I'm still invested in will be sold off in a fire sale You should definitely take your complaint to the FOS. It's very simple and straightforward to do so. I just escalated my complaint to the FOS a few minutes ago, it took me about 10-15 minutes at most. Just to be clear, past FOS cases establish that financial service providers have a right to make commercial decision like changing fee structures so imho a customer is unlikely to get a positive outcome going purely down that route. However, the caveat is that FOS will expect that providers give existing customers who don't wish to continue under the new fee regime an opportunity to say goodbye without incurring any penalties. This is the route I've taken, arguing that PP is not giving me any route to exit without incurring a significant % loss and also forcing me to pay the non-refundable monthly account fee (albeit only £1.20) from day one. I argued that the significant price drop since the new T&Cs were announced was quite predictable and attributable almost wholly to the announcement. PP undoubtedly considers that the January deadline for AUM refunds is a reasonable exit route for unhappy existing investors and I guess that is what the FOS needs to adjudicate on. In any case, I want to ensure (at least on my behalf), that this move is not cost-free for PP. They will need to spend time, effort and money (£550/case after the first 25) on this until there is a ruling from the FOS. To be absolutely honest, after reading the article about PP shrinking to 7 employees by next year, they have far bigger problems to tackle and this action at the FOS is hardly going to make it any more/less likely that they will go under. So please do escalate your complaint to the Ombudsman!
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Post by shootingstar on Oct 1, 2019 21:43:02 GMT
thanks for the advice sceptical. I went down the same path as you in terms of line of argument to the FOS.
Has anyone received any response from FOS as yet? my case is yet to be allocated to a call handler it seems.
separately i see PP are doing an Autumn seminar on 21 October
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Post by chrisp2p on Oct 2, 2019 6:25:09 GMT
Thanks all, very interesting and useful points on here
Having received my final (standard) response from PP i have written my complaint for the FOS which I will adjust to fit their form but thought I would share it here as it may be of use to people
“Property Partners (PP) purchase rental property and then give investors the opportunity to purchase a share of each property for which they are rewarded with a dividend each month (from rental income) and any capital profit/loss when the property is sold after 5 years
I started investing in PP in 2017 and by July 2019 I had a portfolio of £5,676 of property purchased under the T&Cs in force at the time. I was receiving 3.1% pa return on this investment from dividends
In July 2019 PP changed their T&Cs to include a flat £1 pm account fee and 1.2% pa AUM fee (assets under management - effectively 1.2% of the value of my portfolio)
The new fees were retrospectively applied to existing investments purchased under the original T&Cs where these fees did not exist
I refused to accept the new T&Cs as they reduced my returns down to 1.7% pa which is effectively what a bank would pay in interest except that PP investments carried significantly more risk (property values falling, dividends falling, another increase of fees & platform failure). The risk/return was now unacceptable and I had lost all trust in PP to behave fairly so I asked PP how I could exit my investment
PP told me that by having assets on their platform I automatically accepted the new T&Cs and the only short term exit route was to sell the investments on their secondary market but that I had until Feb2020 to do this and any fees incurred would be reimbursed. I believed the secondary market would only have become more depressed over time, especially in the lead up to the Feb2020 deadline so I sold all investments immediately at the best available price and following this my account had £4879 in cash which I withdrew
My original portfolio value (£5676) was determined by independent RICS valuations which PP organise every six months. Following the sale of these assets on the secondary market (which had dropped significantly since the introduction of the new fees) i was forced to sell for £797 (or 14%) below the current asset value
I believe these fees have been applied purely to generate profit for PP shareholders and not in the best interest of investors. I Would have preferred all property held by PP be sold and resulting capital returned to investors. I believe this would have reduced my losses to an acceptable amount however it would not have served the main purpose of the introduction of these fees which was to reward PP shareholders who invested in a failed business model
PPs allure was the ability for a small investor to diversify in the property market, they marketed their product as such. Their fee structure was also a significant factor in choosing to invest with PP. However I believe PP new fees unfairly disadvantaged small investors by using a flat £1 account fee as well as a sliding scale AUM fee which was 1.2% for the first £25k of assets but then dropped to 0.7% for assets over this value
I would like PP to reimburse me the £797 loss of asset value when sold that I experienced as a direct result of their change in T&Cs and applying these to existing investments as well as the 2% purchase fee they charged (legitimately through existing T&Cs) when initially purchasing the investment (£113) as I am now unable to see each investment through to fruition. I believe it was unfair of PP to do this without providing a reasonable option to exit at current market value and without significant loss
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pa
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Post by pa on Oct 2, 2019 10:08:37 GMT
I just thought that I’d pass on the feedback that I received from PP customer services. I couldn’t see it in the thread already but apologies if I’m duplicating and to people with larger accounts that this won’t apply to and have bigger issues to worry about.
So I have a smaller account with PP. I’d invested a reasonable amount about four-years ago. I liked the platform and still like using it but it wasn’t really a worthwhile investment for me (why would I want to invest in one block of student accommodation when I could buy shares in UNITE Group – it’s more than doubled over the same time period, I could buy in a stocks and shares ISA, and sell easily?).
I drew my PP portfolio down to just the odds-and-ends, things that I bought with the monthly earnings and the ones that it wasn’t worth selling and I’m just letting run to the end of the five-year holding period.
For that I receive the grand total of £1.16 a month. Obviously less than the £1.20 fee I now have the pleasure of paying PP a month.
Now I understand this sounds trivial but I can be away for a few months at a time – as has happened now and I’ve come back to find the changes. I was worried about an automatic letter being generated for a petty debt and, because I hadn’t responded, getting escalated a couple of times so I’d come back to all sorts of letters with all sorts of fees and charges heaped on top (obviously I would expect forum members to be on top of their finances but I've seen colleagues get stung on oversights while they've been away - some organisations really go through the gears quickly if they don't get a response).
According to the e-mail I got, “If your account reaches zero we will not take any action.”
I wasn’t going to bother posting but then realised this would affect more and more people who were just letting their portfolio run down and felt that they had to fund their account at time went on. Obviously with the bad-taste-in-the-mouth factor I can’t see people wanting to deposit money to keep the account in credit for a slightly less that SFA yielding investment!
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Post by scepticalinvestor on Oct 2, 2019 15:23:44 GMT
Thanks all, very interesting and useful points on here Having received my final (standard) response from PP i have written my complaint for the FOS which I will adjust to fit their form but thought I would share it here as it may be of use to people I think that makes sense and thanks for sharing. Just a word of caution to make sure that the essence of the complaint you made to PP (for which you have received a final response) is the same that you are using when taking your complaint to the FOS. Many years ago, I had an FOS complaint rejected because my subject of complaint had evolved a bit too much from when I first made a complaint to the bank. So I had to go through the whole process again to get a new final response letter.
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Post by chrisp2p on Oct 2, 2019 15:52:09 GMT
Thanks all, very interesting and useful points on here Having received my final (standard) response from PP i have written my complaint for the FOS which I will adjust to fit their form but thought I would share it here as it may be of use to people I think that makes sense and thanks for sharing. Just a word of caution to make sure that the essence of the complaint you made to PP (for which you have received a final response) is the same that you are using when taking your complaint to the FOS. Many years ago, I had an FOS complaint rejected because my subject of complaint had evolved a bit too much from when I first made a complaint to the bank. So I had to go through the whole process again to get a new final response letter. Thanks sceptical, useful to know I will check my initial complaint email
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Post by shootingstar on Oct 3, 2019 22:00:05 GMT
a theoretical question but any thoughts on what will happen if the Ombundsman actually sides with us the investors in this case?
I'm slightly worried that will result in all customers being treated fairly, and hence PP could go bust as they would have to back track on fees
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bigfoot12
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Post by bigfoot12 on Oct 3, 2019 23:20:28 GMT
a theoretical question but any thoughts on what will happen if the Ombundsman actually sides with us the investors in this case? I'm slightly worried that will result in all customers being treated fairly, and hence PP could go bust as they would have to back track on fees That is my assumption, perhaps not immediately.
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travolta
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Post by travolta on Oct 4, 2019 19:25:28 GMT
I think this is why most of us are holding back on all the weak P2P sites ,such as the other clowns in Funding Secure....
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Post by shootingstar on Oct 10, 2019 15:59:46 GMT
Interesting comments from Mr Bath in his most recent update
"Our first property will have its 5th anniversary on 15 December 2019, followed by more than 30 properties through the course of 2020. This is a significant milestone for Property Partner and a process that we are eager to get underway. Many of these properties are trading on the Resale Market at significant discounts to independent valuation. For example, there are 10 properties with an average of 8 months to their 5th anniversary, trading at a discount of over 16%.To ensure that investors are giving explicit consideration to upcoming 5-year anniversaries, we display this information prominently on the Resale Market. The 5-year exit mechanic gives all shareholders the opportunity to exit at a fair market value. It relies on the direct engagement of investors in each property and the process is an important one for all investors to understand"
It will be interesting to see what happens as these >30 properties hit the anniversary. any thoughts?...I am thinking
1. In general in a majority of cases, shareholders will vote to sell the properties as they want out of the platform 2. The 5 year mechanism suggests that the properties could get relisted, but the odds have to be high that few will have successful relisting's 3. It could make sense to buy "cheap" looking shares in the secondary market in advance of the anniversary dates, but a very healthy degree of skepticism on valuations would need to be applied. Scanning quickly I cant see anything that looks really cheap 4. PP's new fees are likely going to gradually get hit as the number of properties comes down, seems like 30 properties is roughly 1/3 of all of the properties on their site
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mrk
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Post by mrk on Oct 10, 2019 19:04:02 GMT
It will be interesting to see what happens as these >30 properties hit the anniversary. any thoughts?...I am thinking
1. In general in a majority of cases, shareholders will vote to sell the properties as they want out of the platform 2. The 5 year mechanism suggests that the properties could get relisted, but the odds have to be high that few will have successful relisting's 3. It could make sense to buy "cheap" looking shares in the secondary market in advance of the anniversary dates, but a very healthy degree of skepticism on valuations would need to be applied. Scanning quickly I cant see anything that looks really cheap 4. PP's new fees are likely going to gradually get hit as the number of properties comes down, seems like 30 properties is roughly 1/3 of all of the properties on their site
If I'm not mistaken, PP haven't launched any new properties since the July changes? Only development loans. So I wonder if PP themselves are trying to get out of properties and focus exclusively on loans.
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benaj
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Post by benaj on Oct 11, 2019 8:57:57 GMT
I.......
It will be interesting to see what happens as these >30 properties hit the anniversary. any thoughts? PP was setup to build up a diversified property portfolio. Some properties will do well at exit, PP has successfully exited 3 ungeared projects. Some properties will continue to deliver good dividend, good for trading in the resale market and PP will need to work hard to achieve exit due to the amount involved. The rest will probably have to wait a lot longer for a good exit until the market improves, early exit could be offered @ discount.
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Post by shootingstar on Oct 17, 2019 14:44:33 GMT
Initial response from ombudsman received
Your complaint about London House Exchange Limited trading as Property Partner Thank you for the information you sent us.
We’re helping a lot of customers at the moment – so I’m sorry that we won’t be able to reply straight away.
We’ll be in touch as soon as we can. In the meantime, our contact details are below in case you need to speak to us.
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bigfoot12
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Post by bigfoot12 on Oct 30, 2019 8:28:55 GMT
If I'm not mistaken, PP haven't launched any new properties since the July changes? Only development loans. That's what I see, nothing new since June, so 4 months without a new (equity) listing.
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Post by scepticalinvestor on Oct 30, 2019 9:44:21 GMT
If I'm not mistaken, PP haven't launched any new properties since the July changes? Only development loans. That's what I see, nothing new since June, so 4 months without a new (equity) listing. If as had been indicated, PP is cutting staff numbers down to the bone, I guess development loans make more sense than rentals that have to be actively managed one way or the other.
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