zlb
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Post by zlb on Dec 27, 2019 12:40:10 GMT
What have you encountered, or didn't expect in a platform wind-down plans, in administration, or in liquidation that you didn't expect, foresee, or understand, or has come out in the wash, or was hidden in the small print? eg in COL, Ly, MT, TC or others, where there was a plan in place, but eventually the lender is less advantaged than one was lead to believe?
Platforms advertise wind-down plans as a significant backup to platform failure (whatever the cause). However, it seems that things aren't that straightforward - e.g. procedure can be in place which still could advantage the platform owners.
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aju
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Post by aju on Dec 27, 2019 17:57:17 GMT
What have you encountered, or didn't expect in a platform wind-down plans, in administration, or in liquidation that you didn't expect, foresee, or understand, or has come out in the wash, or was hidden in the small print? eg in COL, Ly, MT, TC or others, where there was a plan in place, but eventually the lender is less advantaged than one was lead to believe? Platforms advertise wind-down plans as a significant backup to platform failure (whatever the cause). However, it seems that things aren't that straightforward - e.g. procedure can be in place which still could advantage the platform owners. I have not been unfortunate enough to be in any of these platforms so far to comment directly but my own view would be to expect the unexpected at all times in fact it will be guaranteed that whatever get out is used will not have been one that was thought of by those in the regulatory field. I've noticed others making remarks on other threads concerning the recent wind down plans and I tend to agree with many of them that anyone expecting the FCA and other regulators to be on the ball or worse in control of any of this stuff then more fool them. None of this P2P stuff is probably that far removed from the old wild west in my view and the mess the regs made with the 2008 banking crisis and the fact that the general public basically were used and still are with cwap interest rates had to bail out the banks with their taxes. Ok the blue team basically are still blaming the red team but sadly both sides sort of let the referee make a very bad job of this and there seems to be a distinct absence of anyone really having to take the heat for any of it. We have the select committees that are supposed to keep an eye on much of this regulation stuff but none of what they say or worse recommend gets as far as changing that much I feel.
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pip
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Post by pip on Dec 27, 2019 18:14:17 GMT
What have you encountered, or didn't expect in a platform wind-down plans, in administration, or in liquidation that you didn't expect, foresee, or understand, or has come out in the wash, or was hidden in the small print? eg in COL, Ly, MT, TC or others, where there was a plan in place, but eventually the lender is less advantaged than one was lead to believe? Platforms advertise wind-down plans as a significant backup to platform failure (whatever the cause). However, it seems that things aren't that straightforward - e.g. procedure can be in place which still could advantage the platform owners. I could write a very long article here but will try to keep it brief: - Wind down plan seems non-existent - There is complete legal ambiguity of the position of lenders in the event of an administration. It appears legally there is no relationship between a lender and an administrator, which in the case of FS required lenders to give up most of their advertised protections (ring-fencing of loans etc.) in order to be treated as creditors. Not clear where investors sit in order of creditors, assume as unsecured creditors, therefore ex company directors with secured loans may have more right to proceeds of loans than lenders! - The FCA has not checked that p2p companies have even the most basic of checks in place, including having a winding down plan - Investor assets are not in practice ring fenced. This includes cash which appears to be treated as a company asset in the event of administration and unclear how will be treated when/if distributed. The FSCS protection for cash only applied to the bank account it is in in the event of bank failure, not that the money due to an account holder is protected in the event of platform failure. - P2P directors all brush away other platform failures with excuses like 'all part of natural evolution, they had bad controls we have good ones'. When a platform fail the directors of that company vanish. Ergo when it all goes wrong you are on your own. - The winding up of a p2p company seems a very long winded and costly process. I suspect administrator fees will eat a lot of the returns.
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zlb
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Post by zlb on Dec 28, 2019 10:41:46 GMT
What have you encountered, or didn't expect in a platform wind-down plans, in administration, or in liquidation that you didn't expect, foresee, or understand, or has come out in the wash, or was hidden in the small print? eg in COL, Ly, MT, TC or others, where there was a plan in place, but eventually the lender is less advantaged than one was lead to believe? Platforms advertise wind-down plans as a significant backup to platform failure (whatever the cause). However, it seems that things aren't that straightforward - e.g. procedure can be in place which still could advantage the platform owners. I could write a very long article here but will try to keep it brief: - Wind down plan seems non-existent - There is complete legal ambiguity of the position of lenders in the event of an administration. It appears legally there is no relationship between a lender and an administrator, which in the case of FS required lenders to give up most of their advertised protections (ring-fencing of loans etc.) in order to be treated as creditors. Not clear where investors sit in order of creditors, assume as unsecured creditors, therefore ex company directors with secured loans may have more right to proceeds of loans than lenders! - The FCA has not checked that p2p companies have even the most basic of checks in place, including having a winding down plan - Investor assets are not in practice ring fenced. This includes cash which appears to be treated as a company asset in the event of administration and unclear how will be treated when/if distributed. The FSCS protection for cash only applied to the bank account it is in in the event of bank failure, not that the money due to an account holder is protected in the event of platform failure. - P2P directors all brush away other platform failures with excuses like 'all part of natural evolution, they had bad controls we have good ones'. When a platform fail the directors of that company vanish. Ergo when it all goes wrong you are on your own. - The winding up of a p2p company seems a very long winded and costly process. I suspect administrator fees will eat a lot of the returns. I'm inclined to agree. If the FCA and the platforms aren't sorting out this issue, then is it not down to this forum to call them out on their wind down plans? It seems that this is a time where lenders are being caught unawares. If we start being able to deconstruct a wind down plan to criticise it - 'emperor's new clothes' analysis of each wind down plan, maybe change can then eventually come about? Having the right questions to ask might help, e.g. how much will administrator fees take from lender money pot? (where the implication understood previously is that there is money set aside for this). If the new FCA regs require a wind down plan, and these plans have so far been demonstrated to be meaningless, then that is a start: lenders no longer think a wind down plan is to be trusted.
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zlb
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Post by zlb on Dec 28, 2019 10:44:43 GMT
What have you encountered, or didn't expect in a platform wind-down plans, in administration, or in liquidation that you didn't expect, foresee, or understand, or has come out in the wash, or was hidden in the small print? eg in COL, Ly, MT, TC or others, where there was a plan in place, but eventually the lender is less advantaged than one was lead to believe? Platforms advertise wind-down plans as a significant backup to platform failure (whatever the cause). However, it seems that things aren't that straightforward - e.g. procedure can be in place which still could advantage the platform owners. I have not been unfortunate enough to be in any of these platforms so far to comment directly but my own view would be to expect the unexpected at all times in fact it will be guaranteed that whatever get out is used will not have been one that was thought of by those in the regulatory field. I've noticed others making remarks on other threads concerning the recent wind down plans and I tend to agree with many of them that anyone expecting the FCA and other regulators to be on the ball or worse in control of any of this stuff then more fool them. None of this P2P stuff is probably that far removed from the old wild west in my view and the mess the regs made with the 2008 banking crisis and the fact that the general public basically were used and still are with cwap interest rates had to bail out the banks with their taxes. Ok the blue team basically are still blaming the red team but sadly both sides sort of let the referee make a very bad job of this and there seems to be a distinct absence of anyone really having to take the heat for any of it. We have the select committees that are supposed to keep an eye on much of this regulation stuff but none of what they say or worse recommend gets as far as changing that much I feel. does seem to be the case - there will be a hidden get out method which uses lender money. Shouldn't these plans at least say that lender money held in cash is untouchable? Or do they just not care enough to set up the legality for this properly....
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aju
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Post by aju on Dec 28, 2019 11:09:28 GMT
I have not been unfortunate enough to be in any of these platforms so far to comment directly but my own view would be to expect the unexpected at all times in fact it will be guaranteed that whatever get out is used will not have been one that was thought of by those in the regulatory field. I've noticed others making remarks on other threads concerning the recent wind down plans and I tend to agree with many of them that anyone expecting the FCA and other regulators to be on the ball or worse in control of any of this stuff then more fool them. None of this P2P stuff is probably that far removed from the old wild west in my view and the mess the regs made with the 2008 banking crisis and the fact that the general public basically were used and still are with cwap interest rates had to bail out the banks with their taxes. Ok the blue team basically are still blaming the red team but sadly both sides sort of let the referee make a very bad job of this and there seems to be a distinct absence of anyone really having to take the heat for any of it. We have the select committees that are supposed to keep an eye on much of this regulation stuff but none of what they say or worse recommend gets as far as changing that much I feel. does seem to be the case - there will be a hidden get out method which uses lender money. Shouldn't these plans at least say that lender money held in cash is untouchable? Or do they just not care enough to set up the legality for this properly.... I agree we should hold them to account and I think we sort of do on here, but, we are not really in a position to make this that effective unfortunately. The rather worrying trend is that no one is probably really that bothered anyway and certainly not that much is being listened to or worse being heard - brexit has made that much worse too. This is the business of money and it seems to me that where there is money there is always the opportunity to be fleeced in some way or another. The banks don't care, the government, whoever is in power, doesn't really care - they say they do but its just words that they will later come to backtrack on or present in a redressed way that's favourable to them. There are some well meaning people running quite good select committees, Frank Field springs to mind, but really does anything change from these. Some change does occur but not that much - reports and recommendations get written on a biblical scale but most recommendations are not even considered and worse they take an age to effect anyway. Oops, drifted into "a little bit of politics there". (quote by Ben Elton circa 1980's Thatcher years).
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jaswells
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Post by jaswells on Dec 28, 2019 22:56:30 GMT
I would like to add that only moneything appears to have even for one second considered the lenders when taking the decision to wind down. To my mind they have taken a difficult path to accept company failure whilst seeing through their responsibilities. No such luck at FS and LY, and administration expenses are HUGE.
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zlb
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Post by zlb on Dec 29, 2019 10:40:42 GMT
I would like to add that only moneything appears to have even for one second considered the lenders when taking the decision to wind down. To my mind they have taken a difficult path to accept company failure whilst seeing through their responsibilities. No such luck at FS and LY, and administration expenses are HUGE. So could one say that admin expenses are one of the things that are supposed to be catered for in wind down, but end up being far higher? If there is an agreement that the platform's own income from borrowers then becomes the later admin expenses which are prioritised before lenders returns, this can leave lenders with very little.
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benaj
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Post by benaj on Dec 29, 2019 12:32:36 GMT
The one I didn't really expect is tax relief on NPL.
The amount I could claim tax relief from Lendy is less than 0.1% of my Lendy investment, most of them are NPL now. FS on the other hand, have defaulted most of the FS loan book. The worst, there's not even a tax statement for COL investors.
For Z, RS & LW, it would be a total different story as you wouldn't expect a high level of NPL unless it is a total meltdown of economy.
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ilmoro
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Post by ilmoro on Dec 29, 2019 12:34:57 GMT
The one I didn't really expect is tax relief on NPL. The amount I could claim tax relief from Lendy is less than 0.1% of my Lendy investment. FS on the other hand, have defaulted most of the FS loan book. Why so little for Lendy out of interest? Are you only in Model 1 loans or the recent loans that arent in default? Everything else is claimable via self-determination as 'treatable'
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benaj
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Post by benaj on Dec 29, 2019 12:37:45 GMT
The one I didn't really expect is tax relief on NPL. The amount I could claim tax relief from Lendy is less than 0.1% of my Lendy investment. FS on the other hand, have defaulted most of the FS loan book. Why so little for Lendy out of interest? Are you only in Model 1 loans or the recent loans that arent in default? Everything else is claimable via self-determination as 'treatable' Not sure, I just press tax statement button.
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aju
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Post by aju on Dec 29, 2019 15:54:31 GMT
The one I didn't really expect is tax relief on NPL. The amount I could claim tax relief from Lendy is less than 0.1% of my Lendy investment, most of them are NPL now. FS on the other hand, have defaulted most of the FS loan book. The worst, there's not even a tax statement for COL investors. For Z, RS & LW, it would be a total different story as you wouldn't expect a high level of NPL unless it is a total meltdown of economy. How can you tell an NPL in Zopa and RS for that matter ( I assume but not sure that NPL means Non Performing Loan.) Just curious what do you consider a high level of NPL is? On a secondary note I thought the FCA determined that loans that are not paying for 90 days should be considered as defaults. Zopa is/was 4 months or it was unless they have changed it recently.
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ilmoro
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Post by ilmoro on Dec 29, 2019 16:31:39 GMT
Why so little for Lendy out of interest? Are you only in Model 1 loans or the recent loans that arent in default? Everything else is claimable via self-determination as 'treatable' Not sure, I just press tax statement button. That explains it. Lendy use the narrow 'become' definition which waits for all recovery avenues to be exhausted before declaring a loss. Most platforms, including FS, use the 'treatable' definition which merely requires the loan to be in legal recovery. Lenders can self-determine eligibility under the 'treatable' definition. See the distressed loans thread on the Lendy board for a list of loans that appear to meet the criteria. Probably about 75% of the loan book. Col is much more complicated & requires formal advice from HMRC which is being sort by duck ... so far unsuccessful.
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benaj
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Post by benaj on Dec 29, 2019 16:43:19 GMT
How can you tell an NPL in Zopa and RS for that matter ( I assume but not sure that NPL means Non Performing Loan.) Just curious what do you consider a high level of NPL is? On a secondary note I thought the FCA determined that loans that are not paying for 90 days should be considered as defaults. Zopa is/was 4 months or it was unless they have changed it recently. Let's just hope a total meltdown won't happen. In my case, my Z+ 2017 loans have already exceeded my level of tolerance, but no one would like loan performance of COL / FS / L loan books. Here's an article from HMRC about the irrecoverable loans:- assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/597959/Income_tax_relief_for_irrecoverable_peer_to_peer_loans_FINAL_GUIDANCE__2_.pdfFor loans with security, most platforms do not treat them as irrevocable after 4 missing monthly payment. There is an UK p2p platform does not even treat unsecured loans as irrecoverable after missing 4 months of repayment. In the collapse of COL, the platform is not longer exist and there's not much info from the top administrator because of the COL spectacular mess. If Mintos was authorised by the FCA, the Aforti technical problem would certainly be a interesting topic for irrecoverable loans. blog.mintos.com/update-on-the-aforti-finance-october-7-2019/
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zlb
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Post by zlb on Jan 5, 2020 21:38:12 GMT
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