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Post by bikeman on May 22, 2020 11:05:17 GMT
Sounds like this is a problem of their own making - an unforeseen event not allowed for - calls into question their competence? I really don't understand why they are being so inflexible: surely they can chase defaults? Offer payment holidays? Maybe even call in the loans? If these are rolling 30 day loans why are defaulters still being lent to? Why aren't payments received being used to help liquidity?T&Cs aren't cast in stone, they can be changed and challenged if unfair. Even if this was the case, why close to new investments? There's always those ready to take on riskier investments. By closing off new investments they caused this problem themselves. It's as if they want to preserve their customer base at all costs and  the investors. There's a conflict of interest here and the inflexible t&cs are just an excuse to hide behind. 1) They are doing all the things you mention - but they're not especially relevant here. The LE hasn't been caused by particular problems with the loanbook; it's been caused by all of us freaking out and wanting to withdraw our money because of the global economic situation. 2) These are only rolling 30 days loans from our perspective, in practice. The borrowers don't have to repay every month, and then get the money back. Also, who are the defaulters you think are being lent to? Again, this situation hasn't been caused by defaults... Interest payments and re-financing are helping to increase the cash buffer (this has been discussed countless times in this thread); but that doesn't help us much if we all try to withdraw all our money. 3) Yes T&C can be challenged if unfair from the consumer's perspective. But how would that work here? What do you think is 'unfair' in them that we could challenge that would be helpful? 4) As has been explained before countless times, there would almost certainly be significant regulatory issues with taking on new investments while the platform is essentially shut down. Even if it were possible, a whole new set of T&C would need to be drafted for these lenders and they would likely need to be offered far higher interest rates to throw their money into a locked box like this. 5) I think it's pretty clear they want to help both their borrowers and their investors. Both are crucial for them to be able to continue to operate. As I've said many times before, there is one essential thing that GS overlooked: requiring liquidity for withdrawals in its T&C. If they had included this, the LE would never have needed to have been called. And without it it can't be solved. 1. So if I accept that the issue is not caused by defaulting borrowers, after all the LE was declared very early on when presumably there wasn't too many defaults. GS declaring a LE as soon as a few lenders wanted to withdraw is counter productive 1. they prevent new investments compounding liquidity and 2. they spook investors causing a 'run to withdraw'. Had they held back they would have better assessed the default situation, could have cut off credit to those in trouble or offered payment holidays as appropriate. New investors happy to risk could have stepped in whilst allowing others to bail out. 2. I can see from my loan book that many are 'under management'. These loans keep getting renewed. We wouldn't ALL be trying to withdraw ALL our money if they hadn't spooked us by locking us in. Besides I don't accept that we ALL want out, I'd stay in for better rates if 1. my re-lend settings weren't overruled and 2. new investment was allowed. 3. I think it's unfair that the t&cs clearly didn't allow for this situation so are deficient yet they are being used to lock in investors. 4. The platform didn't need to shut down. It could still be running, borrowers are paying, investors could be investing, but the LE stops everything with no way out. Of course new investors wont be attracted to this 'locked box' but it didn't need to be like this. GS up with t&cs that didn't foresee this event and then blindly followed them without an exit strategy, when it could have simply have continued to take new investment and queued withdrawals. 5. But you say there's not an issue with borrowers defaulting so borrowers don't need helping. GS are apparently about to down their platform because they lack liquidity yet they stop new investment - that hardly seems to be best for investors. I don't think this can't be solved, I think they need to recognise that their LE is a up and modify their terms to get out of it.
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chris1200
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Post by chris1200 on May 22, 2020 11:21:54 GMT
1. So if I accept that the issue is not caused by defaulting borrowers, after all the LE was declared very early on when presumably there wasn't too many defaults. The LE was declared when it needed to be declared because there wasn't enough cash left for us to withdraw. Nothing to do with defaults whatsoever. GS declaring a LE as soon as a few lenders wanted to withdraw is counter productive How could they have done it later? The deployment rate literally reached 100% 1. they prevent new investments compounding liquidity and 2. they spook investors causing a 'run to withdraw'. Had they held back they would have better assessed the default situation, could have cut off credit to those in trouble or offered payment holidays as appropriate. 'Cutting off credit to those in trouble' - what do you think this means exactly? You can't just demand repayment when a borrower isn't in default. Also, again, this has nothing to do with borrowers being in trouble so repayment holidays are not relevant.New investors happy to risk could have stepped in whilst allowing others to bail out. Yes, this would have been lovely. But it literally didn't happen. That's the whole reason the LE had to be called.2. I can see from my loan book that many are 'under management'. And? These loans keep getting renewed. Yes, but from the borrower's perspective the practical effect is just a continuous line of credit. It's from your side that things change every 30 days. We wouldn't ALL be trying to withdraw ALL our money if they hadn't spooked us by locking us in. We already tried to withdraw more than was possible. Besides I don't accept that we ALL want out, I'd stay in for better rates if 1. my re-lend settings weren't overruled and 2. new investment was allowed. 'All' was me being overly simplified. Replace with 'a very high number'/a higher percentage than there is liquidity for (currently we have about 13% liquidity - do you really think only 13% of funds will be withdrawn if they lift the LE?)3. I think it's unfair that the t&cs clearly didn't allow for this situation so are deficient yet they are being used to lock in investors. Unfair =/= deficient. The terms made this situation very clear, including locking you in. You should have understood that before investing. We should also have foreseen the issue with liquidity - I feel silly for not having done so.4. The platform didn't need to shut down. It could still be running, borrowers are paying, investors could be investing, but the LE stops everything with no way out. I've explained to you why the platform had to enter a liquidity event. I've also explained to you why investment can't be solicited during a liquidity event. So I don't understand why you're still saying this. Of course new investors wont be attracted to this 'locked box' but it didn't need to be like this. Well, it did with the terms as they are. No point wishing we had a different situation. GS up with t&cs that didn't foresee this event and then blindly followed them no way for them not to follow them without an exit strategy, when it could have simply have continued to take new investment and queued withdrawals. No it couldn't - see above.5. But you say there's not an issue with borrowers defaulting so borrowers don't need helping. No, I didn't say borrowers don't need helping. I said that that's not what caused the LE. I also said that GS are doing the things you mention to help borrowers. GS are apparently about to down their platform because they lack liquidity yet they stop new investment - that hardly seems to be best for investors. But, based on the current terms, there was no other possible action.I don't think this can't be solved, I think they need to recognise that their LE is a up and modify their terms to get out of it. Yes, modifying their terms is the only way out. The problem is that this is likely to be pretty dodgy legally. I'm not sure what they'll do about this. The chance of investors getting annoyed and taking action seems quite low (but is a risk); but the FCA also may not like it. We'll have to wait and see.My responses in bold (if I could do them in a different colour, I'd really feel like I was back in the City). Hope this clears up these issues.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on May 22, 2020 12:04:39 GMT
I am due to get a bonus next month. Will I get it? If I do will I be able to withdraw it? Edit 28/5 got an email saying it was in my account and can be withdrawn  |
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chris1200
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Post by chris1200 on May 22, 2020 12:21:32 GMT
I am due to get a bonus next month. Will I get it? If I do will I be able to withdraw it? Good question! You'll be best off asking GS, but in the meantime I'd check the T&C for the bonus. If it's silent on the Liquidity Event (or anything similar), then I would imagine you should still get the bonus. As to whether you can withdraw it is maybe a little more complicated...
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Post by garreh on May 22, 2020 13:06:55 GMT
I am due to get a bonus next month. Will I get it? If I do will I be able to withdraw it? I'm not sure if you would still get the bonus but as for withdrawing it - I've contacted GS before and they state you cannot withdraw any money during a Liquidity Event, this includes interest and bonuses.
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treeman
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Post by treeman on May 22, 2020 13:18:07 GMT
I am due to get a bonus next month. Will I get it? If I do will I be able to withdraw it? I'm not sure if you would still get the bonus but as for withdrawing it - I've contacted GS before and they state you cannot withdraw any money during a Liquidity Event, this includes interest and bonuses. littleoldlady Mrs Treeman was paid a bonus a few weeks ago and it was successfully withdrawn
An initial cheeky attempt to add the money in the holding account to the bonus and withdraw it all was politely rebuffed ............
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Post by garreh on May 22, 2020 13:19:52 GMT
bikeman I'm personally of the view that calling the Liquidity Event was overall a positive thing - maybe not in the short term but in the long term it's a protective measure to help keep the platform churning for longer. If they simply ignored the liquidity issue, as you suggested, then things would of gotten nasty real quick and who know's where the numbers would of ended up - the investors that weren't "spooked" would be pretty much tied up indefinitely. As for allowing new investors - this is simply not possible due to FCA regulations. And as Chris mentioned, even if it were feasible, there would have to be a new set of terms to really highlight to new investors that your locking your money away indefinitely, with no protection on capital and for a variable interest rate. Those characteristics would be largely unattractive to any new investors, not to mention potentially immoral - which goes back to FCA regulations. Though I do recognise what your saying - simply calling the Liquidity Event and freezing everyones money and starting a ticking time bomb with the Resolution Event doesn't really provide much confidence in the platform. If GS aren't able to sell the loan book, then I honestly think the best next thing to do is play the waiting game - implement a queued withdrawals system that REQUIRES liquidity in order to withdraw your money, limit amount of your porfolio that you can withdraw in any given month and call off the LE. Though there seems to be a period where they cannot change their terms regarding withdrawals for at least 14 days - so whether there has been a big enough built up buffer of funds to safely cover that period before the queued system kicks in is a bit of an unknown. Is there a possibility they could still be technically abiding by their terms by allowing withdrawals but only interest (a bit like AC are doing at the moment?) - GS terms are pretty left open for interpretation so I would imagine with a good legal perspective on it they could find some wriggle room.
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Post by garreh on May 22, 2020 13:21:31 GMT
I'm not sure if you would still get the bonus but as for withdrawing it - I've contacted GS before and they state you cannot withdraw any money during a Liquidity Event, this includes interest and bonuses. littleoldlady Mrs Treeman was paid a bonus a few weeks ago and it was successfully withdrawn
An initial cheeky attempt to add the money in the holding account to the bonus and withdraw it all was politely rebuffed ............
Interesting, seems like I was given the wrong information by GS - or could it be that my bonus was paid a long time ago and has since likely been invested so cannot be withdrawn, even though I have money in my holding account?
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treeman
Member of DD Central
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Post by treeman on May 22, 2020 13:29:30 GMT
littleoldlady Mrs Treeman was paid a bonus a few weeks ago and it was successfully withdrawn
An initial cheeky attempt to add the money in the holding account to the bonus and withdraw it all was politely rebuffed ............
Interesting, seems like I was given the wrong information by GS - or could it be that my bonus was paid a long time ago and has since likely been invested so cannot be withdrawn, even though I have money in my holding account? The latter sounds right. I suspect it will only apply to a bonus that has stayed as cash. Once it has joined the merry-go-round it has become 'invested funds'...........
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Post by bikeman on May 22, 2020 14:27:45 GMT
bikeman I'm personally of the view that calling the Liquidity Event was overall a positive thing - maybe not in the short term but in the long term it's a protective measure to help keep the platform churning for longer. If they simply ignored the liquidity issue, as you suggested, then things would of gotten nasty real quick and who know's where the numbers would of ended up - the investors that weren't "spooked" would be pretty much tied up indefinitely. As for allowing new investors - this is simply not possible due to FCA regulations. And as Chris mentioned, even if it were feasible, there would have to be a new set of terms to really highlight to new investors that your locking your money away indefinitely, with no protection on capital and for a variable interest rate. Those characteristics would be largely unattractive to any new investors, not to mention potentially immoral - which goes back to FCA regulations. Though I do recognise what your saying - simply calling the Liquidity Event and freezing everyones money and starting a ticking time bomb with the Resolution Event doesn't really provide much confidence in the platform. If GS aren't able to sell the loan book, then I honestly think the best next thing to do is play the waiting game - implement a queued withdrawals system that REQUIRES liquidity in order to withdraw your money, limit amount of your porfolio that you can withdraw in any given month and call off the LE. Though there seems to be a period where they cannot change their terms regarding withdrawals for at least 14 days - so whether there has been a big enough built up buffer of funds to safely cover that period before the queued system kicks in is a bit of an unknown. Is there a possibility they could still be technically abiding by their terms by allowing withdrawals but only interest (a bit like AC are doing at the moment?) - GS terms are pretty left open for interpretation so I would imagine with a good legal perspective on it they could find some wriggle room. There wouldn't be a liquidity issue had they managed a withdrawal queue. If the platform wasn't in LE new investors could still be attracted by better rates or other incentive. They could cut borrowers credit and feed their repayments back to investors. Locking investors in so they can continue a line of credit must be immoral. As has been said borrowers in default is not an issue yet so the loan book has value, so they should be able to make this work. Having a fire sale of the loan book is neither necessary nor in the investors interest. The terms of the LE and RE seem to be flawed. Quite why GS must religiously stick to the terms of something they know wont work is beyond me. Freezing the platform doesn't resolve anything, all it's done is line everyone up for a rush to the door.. It's frustrating that so many of you are taking the line 'the t&cs are flawed but it's there in black and white, nothing can be done'. That is bollocks.
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Post by bikeman on May 22, 2020 14:42:10 GMT
1. So if I accept that the issue is not caused by defaulting borrowers, after all the LE was declared very early on when presumably there wasn't too many defaults. The LE was declared when it needed to be declared because there wasn't enough cash left for us to withdraw. Nothing to do with defaults whatsoever. GS declaring a LE as soon as a few lenders wanted to withdraw is counter productive How could they have done it later? The deployment rate literally reached 100% 1. they prevent new investments compounding liquidity and 2. they spook investors causing a 'run to withdraw'. Had they held back they would have better assessed the default situation, could have cut off credit to those in trouble or offered payment holidays as appropriate. 'Cutting off credit to those in trouble' - what do you think this means exactly? You can't just demand repayment when a borrower isn't in default. Also, again, this has nothing to do with borrowers being in trouble so repayment holidays are not relevant.New investors happy to risk could have stepped in whilst allowing others to bail out. Yes, this would have been lovely. But it literally didn't happen. That's the whole reason the LE had to be called.2. I can see from my loan book that many are 'under management'. And? These loans keep getting renewed. Yes, but from the borrower's perspective the practical effect is just a continuous line of credit. It's from your side that things change every 30 days. We wouldn't ALL be trying to withdraw ALL our money if they hadn't spooked us by locking us in. We already tried to withdraw more than was possible. Besides I don't accept that we ALL want out, I'd stay in for better rates if 1. my re-lend settings weren't overruled and 2. new investment was allowed. 'All' was me being overly simplified. Replace with 'a very high number'/a higher percentage than there is liquidity for (currently we have about 13% liquidity - do you really think only 13% of funds will be withdrawn if they lift the LE?)3. I think it's unfair that the t&cs clearly didn't allow for this situation so are deficient yet they are being used to lock in investors. Unfair =/= deficient. The terms made this situation very clear, including locking you in. You should have understood that before investing. We should also have foreseen the issue with liquidity - I feel silly for not having done so.4. The platform didn't need to shut down. It could still be running, borrowers are paying, investors could be investing, but the LE stops everything with no way out. I've explained to you why the platform had to enter a liquidity event. I've also explained to you why investment can't be solicited during a liquidity event. So I don't understand why you're still saying this. Of course new investors wont be attracted to this 'locked box' but it didn't need to be like this. Well, it did with the terms as they are. No point wishing we had a different situation. GS up with t&cs that didn't foresee this event and then blindly followed them no way for them not to follow them without an exit strategy, when it could have simply have continued to take new investment and queued withdrawals. No it couldn't - see above.5. But you say there's not an issue with borrowers defaulting so borrowers don't need helping. No, I didn't say borrowers don't need helping. I said that that's not what caused the LE. I also said that GS are doing the things you mention to help borrowers. GS are apparently about to down their platform because they lack liquidity yet they stop new investment - that hardly seems to be best for investors. But, based on the current terms, there was no other possible action.I don't think this can't be solved, I think they need to recognise that their LE is a up and modify their terms to get out of it. Yes, modifying their terms is the only way out. The problem is that this is likely to be pretty dodgy legally. I'm not sure what they'll do about this. The chance of investors getting annoyed and taking action seems quite low (but is a risk); but the FCA also may not like it. We'll have to wait and see.My responses in bold (if I could do them in a different colour, I'd really feel like I was back in the City). Hope this clears up these issues. No I didn't examine all of the terms either. I am not a sophisticated investor so wouldn't have picked up on this anyway and so in hindsight I should probably have not invested but I was sucked in by the marketing blurb. You've agreed their LE and RE process are flawed and have boxed GS into a corner but it seems like you accept them, and their dictated course of action just because they exist. Whereas I wont accept them because I consider them to be unfit for purpose and therefore unfair to investors, so I'd have expected GS to excise a duty of care to their investors and not blindly follow them.
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Post by garreh on May 22, 2020 15:51:01 GMT
My responses in bold (if I could do them in a different colour, I'd really feel like I was back in the City). Hope this clears up these issues. You've agreed their LE and RE process are flawed and have boxed GS into a corner but it seems like you accept them, and their dictated course of action just because they exist. Whereas I wont accept them because I consider them to be unfit for purpose and therefore unfair to investors, so I'd have expected GS to excise a duty of care to their investors and not blindly follow them. Your living in cuckoo land if you think terms and conditions are something companies shouldn't "blindly follow". Baffling you even invested in something you didn't understand the basics of. This isn't a standard savings account run by a bank. That's not to say I disagree with the overall sentiments of what your saying - it is frustrating from an investors perspective and I do hope they can find some wriggle room with the terms, but terms are there for a reason. As for "duty of care" that's exactly what GS are doing by calling the LE - had that of not been done we would all be in a far more unfavourable position right now. My main criticism of GS during this time has been lack of transparency and skeptism about the direction they are taking to resolve the issue given the time constraints.
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chris1200
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Post by chris1200 on May 22, 2020 16:10:29 GMT
My responses in bold (if I could do them in a different colour, I'd really feel like I was back in the City). Hope this clears up these issues. No I didn't examine all of the terms either. I am not a sophisticated investor so wouldn't have picked up on this anyway and so in hindsight I should probably have not invested but I was sucked in by the marketing blurb. You've agreed their LE and RE process are flawed and have boxed GS into a corner but it seems like you accept them, and their dictated course of action just because they exist. Whereas I wont accept them because I consider them to be unfit for purpose and therefore unfair to investors, so I'd have expected GS to excise a duty of care to their investors and not blindly follow them. To be clear, I did examine the terms in detail and was completely aware of the process of the LE and RE, I just didn't think through how likely a liquidity problem would be in the event of an economic downturn. And it's not that I think that the LE and RE processes are flawed - I didn't say that at all. They make total sense. It's the problem that caused the LE in these circumstances - not having a requirement for liquidity for investors to make withdrawals. And yes, I agree that terms and conditions have to be followed... obviously. What on earth would be the point of them otherwise? I'm afraid you literally will have already 'accepted' them when you signed up to Growth Street!
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bod
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Post by bod on May 23, 2020 8:44:04 GMT
Interesting, seems like I was given the wrong information by GS - or could it be that my bonus was paid a long time ago and has since likely been invested so cannot be withdrawn, even though I have money in my holding account? The latter sounds right. I suspect it will only apply to a bonus that has stayed as cash. Once it has joined the merry-go-round it has become 'invested funds'........... My husband succesfully withdrew his cash bonus a couple of weeks ago with no problem.
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Post by garreh on May 23, 2020 13:56:53 GMT
chris1200 what's your interpretation for this part in the terms of a Resolution Event? > 6.8. Distributions of available funds will be made to investors on a quarterly basis in proportion to their outstanding investments.
I'm not sure I fully understand what the bolded part means exactly? Does that mean just the overall unpaid outstanding size of the loan book?
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the investors. There's a conflict of interest here and the inflexible t&cs are just an excuse to hide behind.
