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Post by buzzablinio on Nov 24, 2020 14:32:38 GMT
Has anyone sought any legal advice on what LW are doing? I’d be genuinely interested in chatting! Also, could we get a sense amongst us of the negative rate with: (Charge / Balance) x 365......where Charge is the daily acc depletion not due to capital repayments? I raised a case with the Financial Ombudsman after the penalty for early withdrawal was hiked up by several 100% at the start of this year without clear warning and pre covid chaos. Due to the pandemic progress is slow. Reading the board now I am so glad I managed to get most of my money out, though at the time being charged circa 6% for the privilege was infuriating. It seems LW are still operating in a less than clear and investor friendly manner. Perhaps if more complainants took time out to raise awareness of LW behaviour with the F.O. things may improve....personally though...I don't know of a bargepole that is long enough however much they change.
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Post by overthehill on Nov 24, 2020 14:43:04 GMT
Unfortunately the forum deletes any truthful words from the victims in order to hide the truthful action of LW. Therefore unless it’s full of artificial flowers and not weeds a new thread would probably be liable to the same tactics hidden in modern censorship.
From my point of view as a Mod the problem with these "truthful words" is that they tend to appear libellous. Can you guys put these "truthful words" in a way that isn't libel; and we'll be more than happy to leave them as they stand. I should say I think most of you are talking about this in an un-libellous way.
I've stopped posting since I had 2 posts removed. Who needs posters, everybody can just read.
Wouldn't bother me at all if it wasn't for the fact the contents of the whole post are removed and made non-retrievable, it's an arrogant and ignorant response regardless of what the forum rules state. No thought to how long it took to create the post. I got targetted because someone else had already identified the same property, how does that create a dimmer view of my post, an honest mistake as it was. Then 2 other posts get removed because of two single words that apparently made the posts libellous, why not redact the single word or the sentence, would that not be more logical? It's all quite amusing when you've watched HIGNFY on the BBC for the last 30 years. I keep repeating to myself , must not use the words 'stolen' or 'con-man' again unless I turn it into a question or metaphor.
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benaj
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Post by benaj on Nov 24, 2020 14:46:40 GMT
Similar to my experience. I wonder if these reductions are being applied across the board or if it is dependent upon the cohort you are invested in. If can't be across the board as my reductions are different to those quoted on here. My data points are: Total account value on 8/11/2010 = £895.95. Total account value on 24/11/2010 = £895.41. So, a reduction of 0.06% over 16 days for me. Lucky cohorts. 🍀
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r00lish67
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Post by r00lish67 on Nov 24, 2020 14:57:35 GMT
Sorry to hear about what's happening over in LW-land. I no longer pay close attention, but it does seems like the current situation is well explained (if not very welcome) in their blog post"Whilst a period of negative interest rates is needed, the expected annual returns received by every retail investor over the lifetime of their investment is expected to remain positive, i.e. despite the COVID-19 crisis we still expect no capital losses. To account for the impact of COVID-19, the period of negative interest rates will be phased, being more severe for 3 months, then easing after that."As to why they're doing worse than RS, put simply I think it's as their loans were far more risky and their risk-adjusted performance far worse too. Their average APR is/was hugely higher than RS, and their loan performance had really dived even before COVID. Whilst superficially similar, their loans were very different. The types of borrowers paying such high rates were probably in precarious forms of employment that unfortunately suffered more. Only thing that does sound very odd to me is the lack of transaction data to show this, if that's still the case. Perhaps their system isn't coping very well with negative rates. |
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Post by Ace on Nov 24, 2020 15:00:29 GMT
If can't be across the board as my reductions are different to those quoted on here. My data points are: Total account value on 8/11/2010 = £895.95. Total account value on 24/11/2010 = £895.41. So, a reduction of 0.06% over 16 days for me. Lucky cohorts. 🍀 I guess so. Certainly no skill on my part. I made a single investment of £10k in July 2018. I withdrew £9k back in Jan while I could without paying a fee, when things were looking dodgy. I've been withdrawing repayments ever since. I only need to retrieve another £100 to break even. My total XIRR, ignoring bonuses, is currently 4.81%.
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Post by Ace on Nov 24, 2020 15:12:26 GMT
Sorry to hear about what's happening over in LW-land. I no longer pay close attention, but it does seems like the current situation is well explained (if not very welcome) in their blog post"Whilst a period of negative interest rates is needed, the expected annual returns received by every retail investor over the lifetime of their investment is expected to remain positive, i.e. despite the COVID-19 crisis we still expect no capital losses. To account for the impact of COVID-19, the period of negative interest rates will be phased, being more severe for 3 months, then easing after that."As to why they're doing worse than RS, put simply I think it's as their loans were far more risky and their risk-adjusted performance far worse too. Their average APR is/was hugely higher than RS, and their loan performance had really dived even before COVID. Whilst superficially similar, their loans were very different. The types of borrowers paying such high rates were probably in precarious forms of employment that unfortunately suffered more. Only thing that does sound very odd to me is the lack of transaction data to show this, if that's still the case. Perhaps their system isn't coping very well with negative rates. I'm not sure why you think that's well explained. They've given us no idea of the value of the negative interest rates, and no idea of how it affects different cohorts. Telling us that we are not expected to lose capital doesn't narrow it down much. This could be up to a 30% reduction on a 5 year loan at 6%. They must know what reductions they're making since they are already being applied.
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Post by EJi on Nov 24, 2020 15:34:18 GMT
And they say "a period of negative interest rates is needed"
I've been told by email "We expect that negative rates will now be applied for the remainder of 2014-2019 loans."
So it's not temporary.
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Post by jonrgrant on Nov 24, 2020 15:58:28 GMT
Maybe my bank will start taking money from my savings account. By issuing new T&C saying the interest rate earned in previous years is now too much and needs to be reduced by negative interest, at the same time also stopping me from being able to withdraw and access MY money.
for info my current platform support funds being generously extracted from my investment is 0.07% this week to date giving (taking) an annual reduction rate of 3.4%. Last weeks annual rate being 5.6% deduction.
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benaj
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Post by benaj on Nov 24, 2020 16:00:50 GMT
Loan under management: £64.8 mil
Shield future income to cover expected losses according to blog (31st October) : £8.9 mil
13.7%
Although LW still expect no capital losses, the future is not brilliant but not dark.
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Post by Ace on Nov 24, 2020 16:11:12 GMT
And they say "a period of negative interest rates is needed"
I've been told by email "We expect that negative rates will now be applied for the remainder of 2014-2019 loans."
So it's not temporary.
Well, that throws a different light on things. I must have got this wrong somewhere as it looks to me that some people will lose capital. I bought 5 year loans in July 2018. I sold the majority of these in Jan 2020 without a fee after earning a total of about 9% interest. In Jan 2020, some unlucky customers bought these loans. They've been payed almost no interest since and will now be charged negative interest on them until they mature in 2023. Surely they are going to make a capital loss!
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benaj
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Post by benaj on Nov 24, 2020 16:22:25 GMT
And they say "a period of negative interest rates is needed"
I've been told by email "We expect that negative rates will now be applied for the remainder of 2014-2019 loans."
So it's not temporary.
Well, that throws a different light on things. I must have got this wrong somewhere as it looks to me that some people will lose capital. I bought 5 year loans in July 2018. I sold the majority of these in Jan 2020 without a fee after earning a total of about 9% interest. In Jan 2020, some unlucky customers bought these loans. They've been payed almost no interest since and will now be charged negative interest on them until they mature in 2023. Surely they are going to make a capital loss! Those lucky 🍀 could have bought a small portion of your 2018 loans, plus other 2019 and 2020 loans as well. Hopefully, they bought a majority of 2020s 😄
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IFISAcava
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Post by IFISAcava on Nov 24, 2020 16:38:00 GMT
And they say "a period of negative interest rates is needed"
I've been told by email "We expect that negative rates will now be applied for the remainder of 2014-2019 loans."
So it's not temporary.
Well, that throws a different light on things. I must have got this wrong somewhere as it looks to me that some people will lose capital. I bought 5 year loans in July 2018. I sold the majority of these in Jan 2020 without a fee after earning a total of about 9% interest. In Jan 2020, some unlucky customers bought these loans. They've been payed almost no interest since and will now be charged negative interest on them until they mature in 2023. Surely they are going to make a capital loss! There is probably an opaque calculation like the one they used to calculate the variable selling fee that means you won't lose capital. But who knows: absolutely none of this is transparent.
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Post by Matthew on Nov 24, 2020 17:40:33 GMT
Dear forum members, Before addressing some of the questions raised in this thread, I wanted to reiterate that any questions from investors should be raised directly with our customer service team, who will be happy to help and typically respond very quickly. Despite my involvement in some LW threads over the years, we do not regard this forum as an official communication channel - it is a great tool for investors to share experiences and debate, but our official communication channels are via our customer service team, via our quarterly, monthly or weekly update emails, or via our blog. We update our investors on the performance of our contingency fund - the Shield - and its ability to cover anticipated loan defaults on a quarterly basis via our blog, the latest of which can be found here. We have tried to provide as much detail in these updates as possible, particularly since Covid-19, so we do hope you will find this useful information. As part of the quarterly performance analysis, where there is a potential shortfall in Shield funding identified, we have the ability to vary the rate of interest due to investors under their loans and to divert the additional margin into the contingency fund. In April, when we entered into the Normalisation Period as a result of the impact of Covid-19 on the loan book, we also simultaneously reduced the interest due to retail investors to zero and diverted all interest into the Shield. Since then, Covid-19 has continued to place additional stress on borrowers’ ability to repay. This situation is not unique to Lending Works - we benchmark our portfolio performance with 15+ other UK consumer lenders, including all of the high street banks and other major online and P2P lending platforms, and our portfolio performance data puts us within the average in that peer group. Our analysis on the loan portfolio in October 2020 showed that continuing to divert all of the remaining interest payments on the loan portfolio to the contingency fund would not be enough to cover our latest assessment of remaining losses. As a result, there are two options: 1. Allow a deficit to build in the contingency fund with the result that certain investors would be exposed to losses that would not be covered by the Shield. This would result in some investors “winning” and some “losing” purely at random, depending on the loans that had been allocated to them and where the losses were incurred; or 2. Divert further funds into the Shield by varying the interest rate (to a negative rate), effectively spreading the losses across all investors equally (in proportion to their investment) and avoiding a situation where some 'unlucky' investors would be disproportionately negatively impacted. As the contingency fund has been a core part of our philosophy and our customer offering due to the fact that loan losses are spread fairly across all investors, we believe it is vital that the Shield should be enabled to continue to provide this function by giving it the funding it needs to cover expected losses. We believe this delivers the best outcome for our investors as a whole. Investor feedback suggests that this view is supported. Across our entire investor base (c7,000 investors), we’ve had very few customer complaints. Naturally, we would prefer no complaints, but we believe the very low numbers show that most customers tend to agree that this is the best way to proceed in difficult circumstances. We believe the level of concern and complaints would have been much greater if we had taken the alternative decision to allow losses to crystallise where they fall. Furthermore, many long-standing customers have been in touch to express support for the way in which our team has handled the Covid-19 crisis and the various measures we have taken to protect investors' capital. As many of the loan losses we are expecting will occur this winter, the negative interest rates have been phased to redirect a greater proportion of the funds to the Shield during the next 3-months, then from February 2020, the impact will be less pronounced. Additionally, if the loan portfolio actually performs better than our latest expectations, then we will increase interest rates again and the surplus will in effect be redirected back to investors. While we are disappointed with any deviation from our Target Annualised Return, our latest forecasts indicate that, despite the measures taken, no investor will have suffered a capital loss i.e. the value of every account will always be at least equal to the amount they originally invested once their loans have repaid. Furthermore, the average loss-adjusted returns remain favourable when compared to many other main peer-to-peer lending platforms and many other investment asset classes. We fully acknowledge that this has been a very difficult year for the peer-to-peer lending industry and for Lending Works, with the impact of Covid-19 being felt by borrowers and by investors. We are genuinely sorry for any concern that any Lending Works customers have felt as a result of any actions we have taken, but we assure you that these actions were taken to protect the interests of our investors as a whole. As we mentioned in our most recent investor updates, we are now very close to finalising the growth funding transaction we announced in July, so we very much hope to move forward in a more positive manner and will continue to work hard to earn and maintain the trust our investors have shown in us over recent years. Yours faithfully, Matthew |
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keystone
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Post by keystone on Nov 24, 2020 19:17:53 GMT
From the latest Credit risk report www.lendingworks.co.uk/blog/peer-to-peer/credit-risk-performance-update-october-2020"We have seen a significant decrease in the volume of newly granted payment deferrals which reduced from an average of approximately 25 per day in April to approximately 2 per day in September. We are also pleased to report that the vast majority of our loan customers have resumed their repayments at the end of the payment deferral period. At the end of September, approximately 90% of customers exiting their payment deferral period have resumed their regular monthly payments. We regularly benchmark our credit performance figures with all major UK lenders, and ours are in line with the average across the industry, which gives us confidence that our portfolio will perform broadly in line with the high street banks and other significant lenders in the market.
We are confident that out of the remaining 2% of customers who are still on an active payment deferral, the majority of them will also resume their monthly repayments at the end of the payment deferral period." If performance is broadly in line with the industry average, why is LW the only one with Negative interest rates? |
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Post by borderer on Nov 24, 2020 22:04:58 GMT
Matthew wrote:
"Investor feedback suggests that this view is supported. Across our entire investor base (c7,000 investors), we’ve had very few customer complaints. Naturally, we would prefer no complaints, but we believe the very low numbers show that most customers tend to agree that this is the best way to proceed in difficult circumstances. We believe the level of concern and complaints would have been much greater if we had taken the alternative decision to allow losses to crystallise where they fall. Furthermore, many long-standing customers have been in touch to express support for the way in which our team has handled the Covid-19 crisis and the various measures we have taken to protect investors' capital."
This was not the impression I had when I spoke with customer services at LW last week. The poor assistant there clearly stated they were fed up with numerous customers phoning up to complain.
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