keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Oct 30, 2019 11:13:06 GMT
Just had this in an email :-
List loan parts for sale - Our selling tool matches investors looking to sell loan parts with investors looking to buy. However, this is subject to demand from other investors and selling is not guaranteed.
We are constantly looking at ways to improve your lending experience and, following a recent review, we will be launching a new selling tool on 2nd December that will improve your ability to access funds more regularly.
How does the new tool work ?
Currently loan parts are sold on a first come, first served basis and investors wait until they reach the top of the queue before selling any. The new tool will cycle through all investors wishing to sell loan parts as many times as possible within a 120 day period. This will mean investors start to receive money back more regularly from the loan parts that have sold.
A new transfer payment on sold loans
When a loan part is sold, a 1.25% transfer payment will be applied. For example, when selling a £20 loan part, you would receive £19.75 from the buyer (as with the current tool, you would also receive any interest owed on that loan part since the last monthly repayment).
This will help boost returns for investors that buy both new loan parts and loan parts listed for sale on the secondary market. We hope this will attract new customers and funds to the platform. It also brings us in line with other lending platforms although, in our case, Funding Circle does not receive any fees from any loan part sale. The transfer payment does not apply if you want to withdraw repayments as they come in.
100% of the transfer payment goes to the investor buying a loan. Funding Circle does not charge a fee for selling or withdrawing. These graphs show how you could receive cumulative repayments and funds from sold loans. They are indicative and for illustration purposes only.
Easier to change your sale amount
Finally, the new tool will make it easier to change the amount you want to withdraw after you have started selling. You’ll also be able to see the amount received from loan part sales as well as the amount received from repayments, so you don’t withdraw more than you initially requested.
As part of this change we will also be updating our Terms and Conditions. You can find the changes on our information page.
What does this mean for you?
On 2nd December all investors currently selling will be automatically transferred over to the new selling tool. You will then start to sell loans with funds made available more regularly.
While you’ll start getting funds quicker, depending on the date and size of your sale request, the time it takes to access all of your requested funds may be longer with the new tool. We understand this may be frustrating, particularly for those that have been looking to sell for a long time already.
We appreciate this is a big change. We have considered a number of different options as part of our review and strongly believe the package of measures we are launching are in the best interests of the majority of investors and will provide an improved overall service.
to me this feels like a penalty for being at the back of the queue to withdraw, I hope lots of you still in the queue like me will object and say it's unfair on those of us who have already been waiting 3 months
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r00lish67
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Post by r00lish67 on Oct 30, 2019 11:14:24 GMT
1.25% seems an odd number to choose, I wonder why not just 1%?
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keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Oct 30, 2019 11:37:42 GMT
Not that I'm a cynic but ...
I think it will start at 1.25% to the seller which I assume means they buy loans at a little under 1.25% discount
I think the next announcement will be Buyer gets 1% discount
FC keep the rest as an admin fee
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Stonk
Stonking
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Post by Stonk on Oct 30, 2019 12:01:22 GMT
(1) Can FC do this? This change is clearly materially detrimental to lenders, who were told they could access their money fee-free (T&C's apply). Upon making such a change, aren't FC supposed to offer an option to exit and close the account under the existing terms?
(2) Why is it called a "transfer payment", if it doesn't actually exist? As I understand it, when a £20 loan part is transferred, the buyer will pay £19.75, and the seller will receive £19.75. I'm with keitha on this: after a few months, it will change into a payment, and they're getting the terminology and accounting ready for that.
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upperdeane
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Post by upperdeane on Oct 30, 2019 16:03:37 GMT
Did anybody else not receive the email above? For some reason I don't seem to this email and indeed any other emails from FC (they aren't going in my spam either). I rang FC a few minutes ago and they have no clue why i'm not getting emails. So, am I alone with this issue of not receiving FC emails ...anybody else out there in the same boat as me?
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upland
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Post by upland on Oct 30, 2019 16:32:21 GMT
I got it. I thought that selling loans was now free since it became a black box operation. It seems a lot to lose and I would not have invested or tried to see at these levels. Did it used to be 0.25% ?
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sl75
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Post by sl75 on Oct 30, 2019 17:01:45 GMT
I got it. I thought that selling loans was now free since it became a black box operation. It seems a lot to lose and I would not have invested or tried to see at these levels. Did it used to be 0.25% ? Yes. A fee I paid many, many, times (I've "lost" more to fees in total than to defaults!)
The other difference (not that it matters from the seller's perspective) is that this fee is described as going to the buyer rather than to the platform.
I think the 0.25% fee was first introduced when they added the possibility to sell at a premium or discount, so a premium of 0.3% (just enough to cover the selling fee) was not uncommon at times when there was no cashback promotion running.
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mikeh
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Post by mikeh on Oct 30, 2019 17:28:43 GMT
My brain hurts. Does this mean all sales take place at a 1.25% discount?
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Post by Badly Drawn Stickman on Oct 30, 2019 17:38:00 GMT
My brain hurts. Does this mean all sales take place at a 1.25% discount? Looks that way, might need a few old coins to be reintroduced. The Farthing should cover most trades. Why not a nice simple 1%?
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Post by bernythedolt on Oct 30, 2019 17:59:57 GMT
[…] to me this feels like a penalty for being at the back of the queue to withdraw, I hope lots of you still in the queue like me will object and say it's unfair on those of us who have already been waiting 3 months Agree entirely - I've been in the queue nearly three months, and all for nothing.  I feel conned by FC introducing this hefty selling fee, materially changing their terms & conditions post-investment. I hope the FCA takes a dim view of this (but somehow I doubt it). That said, and the way things were going, realistically those currently at three months in the queue would have faced an increasingly long wait - perhaps even a year? - before seeing their loan parts finally sold. The wait time was pretty much doubling every quarter! With the new selling tool, it looks like we might receive at least some sale proceeds here and there. I'm trying to view that as "a bird in the hand...".
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Post by lotus_eater on Oct 30, 2019 18:13:56 GMT
This is not conducive of "customer satisfaction" for sure (the 1.25% charge on monies already invested).
I've been trying to sell out for 120 days now and nothing sold so far, nada. So on almost 30k, now I get to pay almost £400 to get out! Thanks FC and F-U!
I wonder if, when FC burn up that £300m they raised from the IPO, we'll be seeing the biggest failure of a platform yet? I certainly haven't seen many referred investors from my site signing up for months, and so many investors trying to sell out, so it wouldn't surprise me.
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ashtondav
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Post by ashtondav on Oct 30, 2019 18:27:06 GMT
This is not conducive of "customer satisfaction" for sure. I've been trying to sell out for 120 days now and nothing sold so far, nada. So on almost 30k, now I get to pay almost £400 to get out! Thanks FC and F-U!I wonder if, when FC burn up that £300m they raised from the IPO, we'll be seeing the biggest failure of a platform yet? I certainly haven't seen many referred investors from my site signing up for months, and so many investors trying to sell out, so it wouldn't surprise me. Probably shouldn’t have gone into a 5 year product with no guarantee of selling out in under that period. Shame that some people thought you could get 7% and get out with instant access. Clearly deficient knowledge of risk and reward which needs addressing by FCA and allowing access to p2p for knowledgeable investors only. You should have stuck to the Nationwide maybe. FC are nowhere near going under. Luckily my re investments will now benefit from a 1% kicker. Yum! Now I maybe wrong. Will report back on my mistake/portfolio in a few months.
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Post by Ace on Oct 30, 2019 20:56:06 GMT
This is not conducive of "customer satisfaction" for sure. I've been trying to sell out for 120 days now and nothing sold so far, nada. So on almost 30k, now I get to pay almost £400 to get out! Thanks FC and F-U!I wonder if, when FC burn up that £300m they raised from the IPO, we'll be seeing the biggest failure of a platform yet? I certainly haven't seen many referred investors from my site signing up for months, and so many investors trying to sell out, so it wouldn't surprise me. Probably shouldn’t have gone into a 5 year product with no guarantee of selling out in under that period. Shame that some people thought you could get 7% and get out with instant access. Clearly deficient knowledge of risk and reward which needs addressing by FCA and allowing access to p2p for knowledgeable investors only. You should have stuck to the Nationwide maybe. FC are nowhere near going under. Luckily my re investments will now benefit from a 1% kicker. Yum! Now I maybe wrong. Will report back on my mistake/portfolio in a few months. If we we're earning 7% there would be a queue to get in, not one to get out. One of my accounts has an XIRR of 0.2% and the new selling fee will likely push it in to a loss. I for one fully understood and accepted that I could be trapped for 5 years plus. I certainly don't like that it has now come to pass, but I was fully aware it could happen. What I don't accept is that the terms and conditions that I signed up to have been retroactively changed to my disadvantage without my permission, or that F'ing Clowns did not perform the due diligence on loans that I feel I have a right to expect, or that they recklessly lent my money to bump up their figures to enrich the founders via an IPO at my expense. I also understand that they have had to introduce the new selling fee in an attempt to save their company. They are in such a dire position that if they had honoured the current terms by allowing those in the queue to sell for free and take precedence before any new term sales were allowed, it would have taken more than 2 years, and probably much more, to clear the backlog. Therefore their incentive to new lenders would be irrelevant and ineffective, so they had no choice given the position they are in. Whether lenders will be able to get these new terms reversed via the FCA or courts will no doubt be tested, but they really had no option than to give it a try. I can't see a 1.25% discount on purchasing old loans making much difference to prospective investors. If they get 10% old and 90% new loans (figures I've seen quoted, but have no idea if they are correct) it amounts to a 0.125% bonus. That wouldn't have been enough to swing it for me. Obviously can't speak for others. They may well have enough cash to carry on making losses for a few more years, but with, as I suspect, retail lending coming to a virtual halt, I don't see them surviving in the long term. I feel it would be foolhardy to lend them more as they are forced to try ever more desperate measures in an attempt to survive. It can't be long now before their institutional funding dries up too. Unfortunately for them their main issue now is lack of trust, and changing terms under lenders feet won't help this one bit. There can't be many potential new lenders that will choose this platform after the most cursory research when there are so many other alternatives available. In case you're wondering, no, I didn't wake up grumpy today, but this news has made me Flipping Cranky.
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corto
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one-syllabistic
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Post by corto on Oct 30, 2019 21:28:18 GMT
Most here do a risk assessment before investing.
It makes a substantial difference if getting out is relatively easy as compared to relatively difficult even if neither is ever guaranteed. Likewise, whether there is a fee or not.
For the little choice we have, the level of returns, and the repeated and mostly unexpected substantial changes FC does to their model over our heads, it is not worth it.
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Post by Deleted on Oct 30, 2019 21:52:51 GMT
And here it, enforcement of the 120 day ruke is in the FAQ:
"After 120 days if you have any loans parts that haven’t sold they will be delisted. At this point you will receive an email informing you of the amount of the total funds that have been made available through selling loans and repayments. If you'd like to access more of your funds you can log back into your account and request a new sale."
Althought it won't matter that much as each 'cycle' will mean you sell at least one loan part: "In each cycle, every investor will sell a small portion of their portfolio or at least one loan part. The cycle will run continuously through all investors currently wishing to sell."
But... "The length of each cycle will also vary as it depends on demand from other investors at the time."
What if a cycle lasts more than 120days?
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