firedog
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Post by firedog on Jun 8, 2021 9:23:39 GMT
I suspect that a large chunk of this rejected cash will find its way to Loanpad. A platform that didn't suffer from any of the lockin problems during Covid, is happy to accommodate rolling withdrawals, has lower 42% average LTVs, seems to welcome retail investors, and is generally going from strength to strength. The contrast between the two platforms couldn't be more stark. Hope not too much comes Loanpad's way though - they've always been great at paying interest on uninvested cash and I wouldn't like to see that threatened!
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rookey123
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Post by rookey123 on Jun 8, 2021 9:44:35 GMT
I too am appalled by what AC have done tonight, and joined the forum purely to express my huge disappointment. With only a couple of hours warning, AC have transferred almost 100% of the very significant funds I held in the 90AA to my cash account. Like the poster above, I had an ongoing withdrawal request with a couple of months left to run, but would have cancelled it nearer the time (and had AC given any warning at all this would be the outcome, would have cancelled it before these latest round of rule changes). I now have a very large amount of ISA funds sitting earning zero interest with no indication of how long they might take to match, and no apology from AC. For me, despite having previously loved the AC model and the regular predictable interest payments, this is a step too far and I will be winding down fully / transferring all ISA funds out to another provider as soon as I can. I don't really understand your complaint. You had a withdrawal request and it was filled! If you are playing the game of having a constant withdrawal request to give yourself some optionality as it rolls down the curve then fine but I don't think you can complain when it is filled. People on this site complain when they can't get the money out and complain when a withdrawal request is completed. Assetz have made it pretty clear that access to these accounts is reliant upon liquidity and that goes both ways.
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alender
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Post by alender on Jun 8, 2021 10:01:25 GMT
Having got to the unfortunate point where the queue to invest in the access accounts was put in too late IMHO I think AC had little choice. The alternative would have been to reduce the lender interest rates on the access accounts. I doubt this would have been popular and may have seen more money leave the accounts all over again. AC have said in the past they would rather not do this. With so little unallocated cash in the PFs there is little room for flexibility. There was just 50k not ring fenced in the 90DAA at the last update. A single large loan getting into trouble for an unknown reason could have caused issues in the short term at least. Building up the PFs to be able to handle future risks is absolutely critical. The PFs are underfunded at the moment IMHO. I think the reality is that the 90DAA interest rate is perhaps too high at the moment in the short term. CBIL has been very popular with borrowers. AC are yet to be authorised for the Recovery Loan Scheme but if/when they are we don't yet know if this scheme will be more popular with AC borrowers than AC P2P lending. Am not sure how many typical AC borrowers from previous years have now been put off AC P2P and P2P lending for good. AC could have altered the SM so it can trade at a premium, if it did this before it returned to par no new money would have entered the AAs except interest payments, it would not solve the current issue of lack or borrowers but would have reduced the amount of forced repayments. It is again ironic that the SM stopped new money entering the AAs when it was needed but not used to stop the new money when there is an excess.
AC have a target rate set on the QAA and 30D and cannot reduce it any further without breaking the rules which could lead to more FOS complaints, the 90D can be reduced but that would bring it below the other accounts so make less likely anyone will use this account in the future. The only option maybe to create new AAs without a target rate and either move lenders to these accounts or repay the funds, however if too many people chose the repayments AC would be in trouble. Also this may break to T&Cs of the AAs.
As I said until the end of government support P2P and in particular AC model (Loanpad seem to be OK), there will be very few if any viable borrowers and the best borrowers are transferring to cheaper loans.
I think borrowers will return when government support comes to an end after all if you owe money the only important things are the rate and forbearance, AC are good on forbearance it is just the rate, as a borrower you can always leave if there are better offers elsewhere. However I think the problem will be with the lenders, large lenders will be put off because of the flat rate repayments, those who have lost money selling in the SM will not be happy and who will want to invest money when you can be locked in even when there is some excess cash or thrown out when there too much excess cash.
On other matters
You have to ask what was the point of the exit accounts, why did AC wast their time on these, they must have know there is virtually no new borrowers who were worth having, if they did not they will have little understanding of the market they are in. The current AAs seem to be changing into exit accounts.
On the surface it looks like the lenders that have all the money in the notice queue returned have a case, this seems to be breaking the T&Cs, however not sure how much compensation would be due. Also repaying money that was not requested may be against the T&Cs, I don't suppose the FOS get many complaints that investors get their money retuned in full with interest but these accounts are a contract between the lenders and AC and I guess it will come down to the T&Cs. However I would suspect there is a way for an account to be wound down with a notice period but if this is not in the T&Cs investors could argue they rearguard this similar to a PIB except the lender has the right of exit.
The first of FOS complaints put in after lock in are now staring to be investigated, from speaking to them they are well aware of the issues with AC as there seems to be a number of similar complaints. One important point came up (as I predicted), under the FCA variation terms in UK financial services consumer contracts AC must give the customer freedom to exit", contractually and practically if there are variations in terms which are detrimental to the customer, also a T&C that states the T&Cs can be changed is not valid. Only time will tell who is right, however if AC lose there will be some compensation due even if it just for the stress caused. If AC win there is still a bill to pay the FOS for every complaint over 25 per financial year, it is now £750. One question that lenders should ask themselves is will AC P2P lending survive, before all of the covid issues from what I can gather AC as a company have rarely made a profit, now they have all the covid issues and the cost of the FOS complainants, no new borrowers for time and a lot of disgruntled lenders. At present AC priorities are government loans this is short term thinking, if AC are to survive long term they must look to see how they can change to attract both lenders and borrowers.
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Post by Deleted on Jun 8, 2021 10:11:35 GMT
I too am appalled by what AC have done tonight, and joined the forum purely to express my huge disappointment. With only a couple of hours warning, AC have transferred almost 100% of the very significant funds I held in the 90AA to my cash account. Like the poster above, I had an ongoing withdrawal request with a couple of months left to run, but would have cancelled it nearer the time (and had AC given any warning at all this would be the outcome, would have cancelled it before these latest round of rule changes). I now have a very large amount of ISA funds sitting earning zero interest with no indication of how long they might take to match, and no apology from AC. For me, despite having previously loved the AC model and the regular predictable interest payments, this is a step too far and I will be winding down fully / transferring all ISA funds out to another provider as soon as I can. I don't really understand your complaint. You had a withdrawal request and it was filled! If you are playing the game of having a constant withdrawal request to give yourself some optionality as it rolls down the curve then fine but I don't think you can complain when it is filled. People on this site complain when they can't get the money out and complain when a withdrawal request is completed. Assetz have made it pretty clear that access to these accounts is reliant upon liquidity and that goes both ways. Completely disagree with you I’m afraid - it is not “gaming the system” but a long standing feature of the platform (and a completely logical step to slightly reduce personal risk given the various changes and uncertainty at the moment). When a withdrawal request is made in the 90AA the understanding is that in three months time your money will begin to be returned (and if during those three months AC determine it is once more no longer “normal market conditions” you could potentially be waiting an unknown amount of additional time). It has never been implied to my knowledge that the 90 day notice period could be unilaterally shortened by AC and all funds immediately returned without warning. What if you had an expense in 3 months time and were deliberately using the 90AA notice period for this purpose? You would now be stuck with all of your cash earning zero interest! The bigger issue here (and the reason I am transferring my funds out) is the lack of warning / notice (an email a couple of hours before such a substantial action is not sufficient in my view).
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toffeeboy
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Post by toffeeboy on Jun 8, 2021 10:30:40 GMT
I don't really understand your complaint. You had a withdrawal request and it was filled! If you are playing the game of having a constant withdrawal request to give yourself some optionality as it rolls down the curve then fine but I don't think you can complain when it is filled. People on this site complain when they can't get the money out and complain when a withdrawal request is completed. Assetz have made it pretty clear that access to these accounts is reliant upon liquidity and that goes both ways. Completely disagree with you I’m afraid - it is not “gaming the system” but a long standing feature of the platform (and a completely logical step to slightly reduce personal risk given the various changes and uncertainty at the moment). When a withdrawal request is made in the 90AA the understanding is that in three months time your money will begin to be returned (and if during those three months AC determine it is once more no longer “normal market conditions” you could potentially be waiting an unknown amount of additional time). It has never been implied to my knowledge that the 90 day notice period could be unilaterally shortened by AC and all funds immediately returned without warning. What if you had an expense in 3 months time and were deliberately using the 90AA notice period for this purpose? You would now be stuck with all of your cash earning zero interest! The bigger issue here (and the reason I am transferring my funds out) is the lack of warning / notice (an email a couple of hours before such a substantial action is not sufficient in my view). Don't kid yourself of course it is gaming the system. Nothing wrong with it but it is gaming the system and you got burnt becuase you were gaming the system. You had requested your money back and that is what AC has given you. So you think that people you are gaming the system should be told in advance that they are going to get burnt, talk about having your cake and eating it. AC assumed quite correctly in my view that everyone who requested their cash back wanted it so they gave it to them. Do you think that AC should in effect borrow the money from you, someone would have to pay your interest, as that is what would have been happening as they don't have enough borrowers at the moment for the money available to lend. Only one outcome of that I would think.
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alibaba
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Post by alibaba on Jun 8, 2021 10:47:12 GMT
This whole situation smacks of more poor management decisions at AC to me. One minute they're crowing about being the largest P2P platform where retail lenders can still invest and boasting at being a suitable place for the cash being returned from the closing RS accounts, the next minute they're kicking out portions of invested funds. Surely a competent management should have seen this coming and closed to new deposits some time before needing to kick invested funds out! I can't think of any other platform that has "managed" themselves into that position. I've been withdrawing from AC for some time now due to the lack of opportunities in the MLA. I'm now down to under half my peak investment. Due to the constantly shifting sands, I doubt I will add funds back to AC in future, though I'm a sucker for a cashback bribe, so never say never. One good thing that's come out of this situation is that the femto-pence in each of my access accounts has been cleared out. It's satisfying to see clean zero balances in those accounts.
Agree 100% with all of the above. I withdrew everything from QAA a while ago at par, my major concern is 7k in GEA, 7k in GBBA1 and 30k in GBBA2, if and when this is repaid (forever the optimist) I will consider having another look at AC until then Loanpad, CP and Proplend appear to be better run companies with transparency, communication and far less complicated strategies. Everyone to their own.
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eeyore
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Post by eeyore on Jun 8, 2021 11:35:14 GMT
Surely, it is a fundamental function of any organisation operating as a bank to balance the funds required for lending out against the funds received from its "investors". Not to be continously monitoring that balance and controlling the flows on both sides seems to me to be a gross failure. Did AC senior management all go on holiday last week and returned on Monday to find themselves in a pickle? It seems so amateurish to get into this situation.
As to the issue of AC returning all requested withdrawals from the 30- & 90-day notice accounts, I can appreciate the frustration of the dislocation to lenders' cash-flow plans, but if AC had not utilised this option to unload funds, think how much higher than 10% everyone else's funds would have been dis-invested. [Note: this is blatant self-interest - I had no outstanding notice withdrawals.]
Yesterday afternoon, I cancelled AC's automatic reinvestment of my returned funds and requested cash withdrawals to my bank (not that I've seen any of the funds credited yet!). It's money that AC won't be seeing again even though I kept my AC accounts throughout last year.
Update: Funds credited to my bank account today (Tuesday) at 15:53.
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eeyore
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Post by eeyore on Jun 8, 2021 11:46:59 GMT
This whole situation smacks of more poor management decisions at AC to me. One minute they're crowing about being the largest P2P platform where retail lenders can still invest and boasting at being a suitable place for the cash being returned from the closing RS accounts, the next minute they're kicking out portions of invested funds. Surely a competent management should have seen this coming and closed to new deposits some time before needing to kick invested funds out! I can't think of any other platform that has "managed" themselves into that position.
I've been withdrawing from AC for some time now due to the lack of opportunities in the MLA. I'm now down to under half my peak investment. Due to the constantly shifting sands, I doubt I will add funds back to AC in future, though I'm a sucker for a cashback bribe, so never say never.
One good thing that's come out of this situation is that the femto-pence in each of my access accounts has been cleared out. It's satisfying to see clean zero balances in those accounts. Agree 100% with all of the above. I withdrew everything from QAA a while ago at par, my major concern is 7k in GEA, 7k in GBBA1 and 30k in GBBA2, if and when this is repaid (forever the optimist) I will consider having another look at AC until then Loanpad, CP and Proplend appear to be better run companies with transparency, communication and far less complicated strategies. Everyone to their own. I don't know Loanpad or CrowdProperty well enough to comment, but I could not rank Proplend on any scale of transparency and communication other than very low. And their recently-introduced investment process seems to operate on a strategy to favour Proplend over the lenders, which maybe indicates it is indeed well run!
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rscal
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Post by rscal on Jun 8, 2021 12:28:35 GMT
To clarify. People should not have had outstanding withdrawal requests at the point when these non-requested returns were made b/c the queue had dropped to nil hadn't it? As to 30 and 90 days requests, those should have been paying out on maturity in a the usual way. So what are people saying has happened? I found that 10% of my 30 day balance was returned (and subsequently now withdrawable) yesterday but the rest now has to go into a waiting queue when I request it.
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Post by davefoz on Jun 8, 2021 15:37:53 GMT
As if to prove a point Somo initiate a loyalty bonus for existing members offering premium rates. On offer today loans in Houses not developments with 1st charges (not a penny lost) 7.2% 35% LTV 9.6% 58% LTV.
AC have done you a favour if they’ve given back your capital - dump this shower for pastures greener and safer.
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p2pfan
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Post by p2pfan on Jun 8, 2021 16:02:42 GMT
As if to prove a point Somo initiate a loyalty bonus for existing members offering premium rates. On offer today loans in Houses not developments with 1st charges (not a penny lost) 7.2% 35% LTV 9.6% 58% LTV. AC have done you a favour if they’ve given back your capital - dump this shower for pastures greener and safer. I'm certainly going to exiting from AC. They have slapped me in the face for all my loyalty and support, kicking me out of the 90DAA entirely. I'd gone to considerable effort to deposit an additional significant sum into it just last week. I've spent the ** whole day ** trying to get hold of AC and, as per every single time I've tried to ring them on all their numbers in the last year, they have not bothered to pick up of the phone. I have already started the process of focusing my investments onto other platforms. I've invested over £50k elsewhere today alone. AC might think they are the bees knees at the moment for treating their retail lenders like absolute dirt in recent times, kicking them in the teeth time and again, while they favour their CBILS and Recovery Loan Scheme buddies, but one day they will rue how they kicked their retail lenders to the curb.
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Post by df on Jun 8, 2021 20:21:22 GMT
I suspect that a large chunk of this rejected cash will find its way to Loanpad. A platform that didn't suffer from any of the lockin problems during Covid, is happy to accommodate rolling withdrawals, has lower 42% average LTVs, seems to welcome retail investors, and is generally going from strength to strength. I had a similar thought. It won't come as a surprise if LP gets oversubscribed and stop accepting new money. Thinking of topping up LP could be a good idea, but that would ruin my diversification strategy 
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trium
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Post by trium on Jun 8, 2021 21:15:17 GMT
And you immediately put it on notice to withdraw. Apparently.
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firedog
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Post by firedog on Jun 9, 2021 7:39:59 GMT
Leaving aside the schizophrenic appearance of AC's strategy, a fundamental problem for me is that I don't follow their thinking. Their emails are so muddied, so lacking clarity, so nervously talkative that to put it brutally, I don't understand what's going on.
This week's email took the equivalent of two sides of A4 to make a simple announcement. (And of course, it prompted a second email with further detail.) At least this was only a fraction of the length of the one a few weeks ago introducing withdrawal fees, or the short novel the month before which said new lending was starting. One in January took nearly 1,000 words to mumble something about the lending fee, introduced in a series of voluminous emails months before, was being reduced; another impenetrable one last August (I think about untradeable loans, but life was too short); the series of indistinct essays introducing a marketplace the same month. It took a thousand words last June just to tell us rates were dropping.
By contrast when I read a CrowdProperty update, I understand it. The language is simple and concise and the strategy is consistent. That makes it easier to understand. Same with Loanpad. Their monthly updates haven't always been upbeat, but they've been concise and straightforward.
I'm not claiming clear communications is a guarantee of success. Plenty of examples, I'm sure, of the opposite. But I'm left with the impression that if AC can't explain things clearly to me, do they truly understand things themselves?
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alender
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Post by alender on Jun 9, 2021 8:04:36 GMT
Leaving aside the schizophrenic appearance of AC's strategy, a fundamental problem for me is that I don't follow their thinking. Their emails are so muddied, so lacking clarity, so nervously talkative that to put it brutally, I don't understand what's going on. This week's email took the equivalent of two sides of A4 to make a simple announcement. (And of course, it prompted a second email with further detail.) At least this was only a fraction of the length of the one a few weeks ago introducing withdrawal fees, or the short novel the month before which said new lending was starting. One in January took nearly 1,000 words to mumble something about the lending fee, introduced in a series of voluminous emails months before, was being reduced; another impenetrable one last August (I think about untradeable loans, but life was too short); the series of indistinct essays introducing a marketplace the same month. It took a thousand words last June just to tell us rates were dropping. By contrast when I read a CrowdProperty update, I understand it. The language is simple and concise and the strategy is consistent. That makes it easier to understand. Same with Loanpad. Their monthly updates haven't always been upbeat, but they've been concise and straightforward. I'm not claiming clear communications is a guarantee of success. Plenty of examples, I'm sure, of the opposite. But I'm left with the impression that if AC can't explain things clearly to me, do they truly understand things themselves? If you think the emails are bad don't try looking at Stuart's Videos, goes on and on giving you all the information about covid and the state of the economy which we all have heard many times before with emotional statements about those affected, it is only at the last 5% that there is some useful information which needs further clarification, all accompanied by music to set the mood. They are a cross between a party political broadcast and a charity appeal except they go on longer.
One of the benefits of being out of AC is I do not have to face the prospect of listing to another one of these.
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