Mucho P2P
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Post by Mucho P2P on Aug 5, 2019 12:00:32 GMT
I agree with Godanubis. It is very unfortunate that several of FS loans encountered problems. It appears that these were all due to the actions and/or lack of actions of the previous owners and Directors of FS, compounded by FS being a victim of fraudulent intent by some borrowers. The current management (who I have spoken to several times over the past couple of months) appear to be diligently working their way through the defaults left by the previous team. Investing, and that is what P2P is about, is akin to purchasing shares or other financial instruments. Anyone who had purchased shares in similar numbers to their P2P loans, are probably aware that some (a few companies’) shares will perform very well, most will linger about not going anywhere for years on end, and a few will tank, and this is even the case with the major listed companies over time, let’s not mention the statistics for AIM shares or even non-listed crowd funded investments. Just as a share portfolio will drop in value over time, so will a P2P investment portfolio drop occasionally in the immediate/medium term. Any P2P loans should be fully diversified not only within a platform itself, but between several platforms. P2P investments/loans should be part of a fully diversified investment portfolio. P2P is a form of investing. P2P is lending money on a level just above trust status, where you have to undertake your own Due Diligence on the platform you are loaning through in order to be satisfied that the Directors are actually fully aware of their capabilities, duties, responsibilities and limitations. Anyone moaning about the defaulted loans at FS, how many undertook their own DD on the “old” FS team prior to placing funds with them? The FCA logo is not a guarantee, nor a stamp showing that the firm knows fully what they are doing. It is merely an indication that the firm is operating (at FCA application and/or inspection intervals) to a set of known and approved criteria. This is not meant to be a confrontational posting, but rather one of fact. Anyone who has been in a similar situation as the new owners of FS will be aware of the conundrum that they face. It will tax the abilities of the best of the best of business advisors to rectify. Should anyone have any better ideas than are currently being utilised by the new owners of FS in sorting out the defaulted loan book, I am sure that the Directors would be more than willing to hear your constructive thoughts rather than moans and groans. Conclusion: It boils down to the “Lendy outcome”. Does anyone really want the old Directors of FS to throw up their hands in surrender and lose nearly all of the lenders’ monies, or for a new team to take on the fight, inject significant new capital and expertise, and recoup more of the defaults than an administrator would do? Lending and investing are the same, and that's a fact? When you lend money you do not participate in the success or failure of an investment. Lending creates a debt, which does not disappear if the venture for which the money is used is unsuccessful. The whole purpose of secured lending is that you guard against the failure of a project or business by securing the loan against an asset which has independent value. Many failures here are in obtaining appropriate security for the loans. You do not just forget about the debt and security if the borrower's project or investment fails. Convenient to just write off the failures of previous management as bad investments, but this is fundamentally different. The debts still exist and are not be forgotten so easily. At the macro level, yes, manage p2p as an investment, through diversity. But at the micro level, these guys owe you money that is supposed to be secured on an asset, and the platform has a duty of care towards you, no matter who now owns it, and how much they paid for it as an investment. Nil carborundum, adrian77
They are similar in that you are parting with your capital to a third party in the hope of a return. Once capital is no longer in your possession you relinquish certain controls, risk increases. When you lend money you do not participate in the success or failure of an investment. Lending creates a debt, which does not disappear if the venture for which the money is used is unsuccessful. The whole purpose of secured lending is that you guard against the failure of a project or business by securing the loan against an asset which has independent value. Many failures here are in obtaining appropriate security for the loans.
As I stated above, previous Directors actions/inactions and fraud have led to this situation. Nothing to do with the current owners of FS who are fervently attempting to rectify the situation for them and YOU. You do not just forget about the debt and security if the borrower's project or investment fails. Convenient to just write off the failures of previous management as bad investments, but this is fundamentally different. The debts still exist and are not be forgotten so easily.
All professional lenders will encounter loans that can not be paid. This is part of the business of lending. If professional lenders encounter unrecoverable loans, retail investors will also encounter defaults. Hence, a well balanced loan portfolio within a well balanced investment portfolio mitigates overall risk. It takes time to recover debts from unwilling borrowers. I know, I have been involved in many instances of retrieving monies for clients from people from most walks of life, right up to premiership footballers. FS are working on recoveries as we communicate. At the macro level, yes, manage p2p as an investment, through diversity. But at the micro level, these guys owe you money that is supposed to be secured on an asset, and the platform has a duty of care towards you, no matter who now owns it, and how much they paid for it as an investment.
Again, I am more than happy that the new team at FS are attempting to sort out the issues left by the old owners. Had they NOT stepped in, then FS would more than likely have gone the way of Lendy which is a far worse outcome than having a few outstanding, or partly recovered debts. Maybe the "duty of care" point should be addressed to the old owners and not the new owners of FS?
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arby
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Post by arby on Aug 5, 2019 12:04:35 GMT
If you leave a window open and are subsequently burgled, are you still a victim? Maybe you brought it upon yourself, but you are still a victim. I haven't denied the real victims are the investors, but stating FS aren't also victims of what is now demonstrably a crime implies an inability to look at a larger picture from other angles. FS's whole reason for being is to check out borrowers and put the good ones forward with a recommendation to lend. That they did that appallingly badly, losing their own credibility in the process and subsequently costing them tiny amounts of money compared to the money lost by investors I don't think deserves them any sympathy whatsoever. They left the window open when it was their responsibility to keep it closed and locked. I didn't mention sympathy. While the cost to investors can be quantified, it's impossible to know at this stage what the cost to FS will be of their mistakes. You say FS's reason for existence is to check on the borrowers, and yet FS openly state in their terms they don't do borrower checks and we decided to invest anyway. FS made mistakes, yes, but fraud is a crime and denying FS are also the victim of a crime is bonkers. Literally look at the court case: "The claimant peer-to-peer lender claimed against the defendant borrower in debt under a number of loan agreements and for damages for breach of contract and deceit" If FS is not also a victim then how are they the claimant?
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Mucho P2P
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Post by Mucho P2P on Aug 5, 2019 12:04:57 GMT
....compounded by FS being a victim of fraudulent intent by some borrowers..... Really? FS are the victims here? How? Reputation and finances involved in rectifying the matter.
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Post by portlandbill on Aug 5, 2019 12:12:44 GMT
Really? FS are the victims here? How? Reputation and finances involved in rectifying the matter. I think you've missed the point
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michaelc
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Post by michaelc on Aug 5, 2019 12:15:21 GMT
If you leave a window open and are subsequently burgled, are you still a victim? Maybe you brought it upon yourself, but you are still a victim. I haven't denied the real victims are the investors, but stating FS aren't also victims of what is now demonstrably a crime implies an inability to look at a larger picture from other angles. That they did that appallingly badly, losing their own credibility in the process and subsequently costing them tiny amounts of money compared to the money lost by investors I don't think deserves them any sympathy whatsoever. They left the window open when it was their responsibility to keep it closed and locked. Not sure I agree with that. I've always seen FS as the Ebay of p2p - pile 'em high and showcase. Their descriptions should be accurate of course and the vast majority are. A handful have slipped the net in that regard and have/are being highlighted in this thread. For me, jury is still out whether the new management can turn things around.
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adrian77
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Post by adrian77 on Aug 5, 2019 12:17:51 GMT
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To be honest this "victim" talk really annoys me - of course borrowers are going to try it on and FS have a duty of care to look for it etc. Every day I deal with builders who tell me they are wonderful but they are rubbish. If FS's office had been smashed by a bulldozer they would be victims - I can see no loan where FS have no excuse for not picking up the fact the borrower was a bit on the wide side. If we take the art loans it looks to me as if FS were sown up like a kipper and all they had to do was ensure they owned the damn art works! Where are there - dunno m'Lord they might be in Dubai - you what! I tell you who the victims are here - those of use that entrusted FS with our money - some of whom are liable to lose a vast sum of money
True this is the old management but I still think FS should stand by their mistake and reimburse the lenders - now that would restore some "street cred"
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Post by brightspark on Aug 5, 2019 13:15:13 GMT
I fully concur. In taking on the platform the "new" management needs reminding forcefully and regularly that until all the previous awful lending propositions are put to bed a significant cadre of lenders will continue to put their business elsewhere. For me that means Rishton, Powerboat, Formby all need to be resolved. It is no good telling me it is time to move on. Every time I log in to my account these live loans are still there along with a couple of other duds. The dead and buried Irish wind turbine will continue to rankle with me as investors were grossly misled - swindled I would say - into investing into an asset that subsequently was 37% as valuable as its original attribution.
My failing to perform loans are minuscule in the great scheme of things but others either more unlucky or more foolhardy are nursing crippling losses to their capital. For them it is impossible to put matters behind them and move on and not for one moment should they be so urged.
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Mucho P2P
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Post by Mucho P2P on Aug 5, 2019 13:26:39 GMT
. To be honest this "victim" talk really annoys me - of course borrowers are going to try it on and FS have a duty of care to look for it etc. Every day I deal with builders who tell me they are wonderful but they are rubbish. If FS's office had been smashed by a bulldozer they would be victims - I can see no loan where FS have no excuse for not picking up the fact the borrower was a bit on the wide side. If we take the art loans it looks to me as if FS were sown up like a kipper and all they had to do was ensure they owned the damn art works! Where are there - dunno m'Lord they might be in Dubai - you what! I tell you who the victims are here - those of use that entrusted FS with our money - some of whom are liable to lose a vast sum of money True this is the old management but I still think FS should stand by their mistake and reimburse the lenders - now that would restore some "street cred" " I still think FS should stand by their mistake and reimburse the lenders" <- I could not agree more with you on this point as it would show ethics. It is one of many issues that I have already investigated for other FCA regulated businesses. Unfortunately, it is not that simple anymore due to the FCA regs in place which places limits on what can be done to restitute client losses. Regrettably, I cannot paste the relevant hyperlinks, as there are many that are all inter-related to various chapters in the FCA manuals and that does not aid in clarifying the matter succinctly, unless one is in Compliance!
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Mucho P2P
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Post by Mucho P2P on Aug 5, 2019 14:13:59 GMT
If you leave a window open and are subsequently burgled, are you still a victim? Maybe you brought it upon yourself, but you are still a victim. I haven't denied the real victims are the investors, but stating FS aren't also victims of what is now demonstrably a crime implies an inability to look at a larger picture from other angles. FS's whole reason for being is to check out borrowers and put the good ones forward with a recommendation to lend. That they did that appallingly badly, losing their own credibility in the process and subsequently costing them tiny amounts of money compared to the money lost by investors I don't think deserves them any sympathy whatsoever. In fact they didn't lose any money, they just didn't make as much as they would have if they'd done their job right. They left the window open when it was their responsibility to keep it closed and locked. " put the good ones forward with a recommendation to lend. " <-FS are prohibited from recommending any investment under their FCA licence as they do not have an asset management licence.
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arby
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Post by arby on Aug 5, 2019 14:17:23 GMT
FS's whole reason for being is to check out borrowers and put the good ones forward with a recommendation to lend. That they did that appallingly badly, losing their own credibility in the process and subsequently costing them tiny amounts of money compared to the money lost by investors I don't think deserves them any sympathy whatsoever. In fact they didn't lose any money, they just didn't make as much as they would have if they'd done their job right. They left the window open when it was their responsibility to keep it closed and locked. " put the good ones forward with a recommendation to lend. " <-FS are prohibited from recommending any investment under their FCA licence as they do not have an asset management licence. This sums up one element of why this type of lending may well be regulated away. It could easily be viewed by the regulator as just not suitable for consumer investing as too many are used to just choosing a pension portfolio or equity fund which does have an investment manager.
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agent69
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Post by agent69 on Aug 5, 2019 15:02:25 GMT
My drawing a line was under the constant moaning. Not under the recovery of losses. I suspect that if the losses stop, the moaning will stop.
People want action not words.
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Post by brightspark on Aug 5, 2019 16:28:36 GMT
"FS are prohibited from recommending any investment under their FCA licence as they do not have an asset management licence." True as far as it goes but the platform can advise the gilding of any lily in such a way as to make it a tempting proposition, subsequently hiding behind the subterfuge that it was the borrower supplied the descriptors. There has to be ethical behaviour. If not eventually there is a breakdown of trust, investors withdraw and business collapse.
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wuzimu
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Post by wuzimu on Aug 5, 2019 16:40:21 GMT
. To be honest this "victim" talk really annoys me - of course borrowers are going to try it on and FS have a duty of care to look for it etc. Every day I deal with builders who tell me they are wonderful but they are rubbish. If FS's office had been smashed by a bulldozer they would be victims - I can see no loan where FS have no excuse for not picking up the fact the borrower was a bit on the wide side. If we take the art loans it looks to me as if FS were sown up like a kipper and all they had to do was ensure they owned the damn art works! Where are there - dunno m'Lord they might be in Dubai - you what! I tell you who the victims are here - those of use that entrusted FS with our money - some of whom are liable to lose a vast sum of money True this is the old management but I still think FS should stand by their mistake and reimburse the lenders - now that would restore some "street cred" When it comes to the art loans FS make a big play of the fraud word. But read the court judgement actually only 1 painting (the lowry) was made out in deceit all the others were decided in contract. In other words the loss is not down to fraud (lowry excepted), the loss is down to FS stupidity.
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blender
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Post by blender on Aug 5, 2019 16:45:48 GMT
Maybe the "duty of care" point should be addressed to the old owners and not the new owners of FS? Not wishing to continue a point-by-point debate, but this last point is nonsense. The company that runs the platform is the legal person with whom you do business. You do not have any legal relationship with the owners or directors of the business. If it's sold as a going concern there is no material change in the relationship. FC is now a plc - but there is no wiping of the slate clean.
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Post by portlandbill on Aug 5, 2019 16:48:41 GMT
FS's whole reason for being is to check out borrowers and put the good ones forward with a recommendation to lend. That they did that appallingly badly, losing their own credibility in the process and subsequently costing them tiny amounts of money compared to the money lost by investors I don't think deserves them any sympathy whatsoever. In fact they didn't lose any money, they just didn't make as much as they would have if they'd done their job right. They left the window open when it was their responsibility to keep it closed and locked. " put the good ones forward with a recommendation to lend. " <-FS are prohibited from recommending any investment under their FCA licence as they do not have an asset management licence. From FS home page - "Our tax efficient Innovative ISA programmes and peer-to-peer lending opportunities are carefully selected, appraised in detail, robustly structured and professionally managed by teams of proven sector specialists." what's that if not a recommendation?
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