Introduction of lender membership fees (AC)

This platform (Octopus Choice) has very different types of loans and no obfuscation within the platform. They have nothing to hide and don't engage in 'innovative finance' to maximise profits at the detriment to their investors. What annoys me most about AC is not that they get into trouble, but that they are not upfront about things and stubborn as hell when people tried pointing out risks (because 'we know better!' attitude).

If they have a chance of getting through this, they need to stop thinking about maximising their profits and focus at shrinking their books at minimal costs to lenders. It's the only way lenders will return and trust their money to them.
Their current strategy ONLY makes sense if they know that their ship has already sunk and they are now trying to pick up as many crumbs as possible before they go under. There is no way anyone will want to stay or put any money back if they continue to behave like this.

As I suggested in another thread the "lender fee" should be converted into equity in AC at a down round valuation.

Aren’t both options kind of the same? Since it’s all about the assets, it doesn’t really matter if we allow borrowers to delay repayment or default. The only difference is that the longer the aaset is ‘managed’ by AC, the longer we need to pay this pointless management fee.
The assets don’t need to be realised straight away. If we take the view that the crisis is going to let around 6-12 months, the risk of waiting longer is that AC is going to keep inventing more imaginative ways to charge us. Just because.
Judging by the actions and decisions taken, AC are not looking at the long term. They are looking how to maximise THEIR income stream in the short term.

I agree it should have been two votes.  The second, regarding the lender fee, should have called out clearly the whats whys whens etc.  

If AC's business model is currently at risk they should tap their shareholders, then their banks, then the government.  Don't forget that AC itself will be able to apply for all sorts of Rishi handouts at the moment. Handouts that I personally can't apply for.  If in the last resort they need to tap lenders so that we help ourselves to help protect our capital then we should share in some potential upside (see previous idea about lender fees converting into equity at a down round valuation).  As it is, regardless of whether or not the Ts & Cs allow for it, this is clearly a lender shakedown.  We may not have any choice, but we do not have to like it.

So I voted "agree", but I resent how AC have handled this.

Tagging stuartassetzcapital for comment.

One big issue paying a blanket management fee (on top of the massive spreads they already charged when writing loans) is that it incentivises them to keep the loan book as large as possible (bigger loan book, bigger fee). It’s the wrong approach and will drive majority of investors away.
Also, please don’t be so naive (not you but general you) and make the mistake in assuming that just because they are going to charge more now, to tie them over, it means that you will be more likely to get something later. it doesn’t work like that.
If you knew that they knew that they are unlikely to pay anything out because not only the borrowers but more importantly, AC themselves have ran out of liquidity (to mess around with how they distribute our funds across their various black box accounts and move money from one frozen loan to another and release pennies every day from QAA to pretend that there is liquidity coming in when there clearly isn’t), given that they are likely to have this knowledge, would you consider it reasonable of them to employ this new fee structure?

This was really unfortunately quite predictable (now talking about locking investors into accounts that paraded for being liquid). These QAA type of accounts will work massively in their favour but only when the conditions are right. Do you guys have any idea how much extra profit they already made by having access to that kind of liquidity? Exactly. Only they know this.
But in times like these, those same accounts will also be their and investors’ downfall. Because their models don’t anticipate drastic changes in global circumstances (i predicted this using even mild forms of distress and tried to explain it to them, only to have been met with defensive arrogance). Their models use a specific default algorithm based on data that is similarly comparable to apples & oranges.

I am just saying that one should never assume things are as one is being told. Protect yourselves and push back, where you can. There is a big difference between a company taking a long term view for the benefit of everyone (eg Octopus Choice, by way of REDUCING fees) and AC (by getting as much as possible for themselves in the short term).