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Post by benj111 on Feb 22, 2021 13:00:57 GMT
@adrainc ilmoro beagleI could equally quote 1.2. We provide an exchange platform on www.ratesetter.com and other websites operated by or on behalf of selected partners. The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lenders, either or both of which may be individuals or companies. You confirm that when lending through the platform, you are not lending in the course of business.
3. RateSetter’s role 3.1. Our role is to operate the RateSetter platform which matches lenders with borrowers, and to facilitate credit agreements between them. We also administer and manage all aspects of these loans on your behalf.I suppose peer to peer lending is a lot like that other tech industry, the gig economy. Both exist by sidestepping regulations to get themselves in the position where they can avoid all the established costs. I'm quite sure Ubers T&Cs say their 'independent contractors' aren't employees. but UK courts have decided they are. I've already stated that they have a duty of care towards us. they can't disclaim that away in the T&Cs. They were diverting away half our interest to the provision fund whilst simultaneously being in advanced negotiations with another party to sell that provision fund. They've sold investments at par, despite being backed by a fund that theyre saying should cover 180% of the capital losses and 100% of the interest losses. If I had a bond with that, I would not be valuing it at par. Then theres the Elephant in the room. Metro owns Ratesetter. this isn't a negotiation amongst equals. this is a situation of you paying me to look after your investment, and my boss coming in wanting to do a 'fair' deal. have Ratesetter released any figures to justify the price theyve negotiated? Their wording above states The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lendersBut their T&Cs only talk about their agreement with us 16.1. We can end our agreement with you, close or suspend your RateSetter account and stop providing any servicesby giving you at least two months’ notice.16.2. We can end our agreement with you, stop providing any services and close your RateSetter account immediately and without notice if:So its still unclear to me if they can step in and unilaterally end these agreements. And finally 3.2 entering into any transfer arrangements on your behalf in order to transfer the benefit of any loans (or part thereof) to the Provision Fund, another RateSetter investor, RateSetter itself or a third party; and
I mean you could read the above as Ratesetter having the right at any time to transfer your money to me or my money to themselves. without consideration, that quite clearly isn't legal. I suppose you could argue that theres inherently a consideration in all of these transactions, but currently we are paying for a provision fund we will never be likely to use, so it doesn't seem like we are getting consideration.
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adrianc
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Post by adrianc on Feb 22, 2021 13:50:21 GMT
@adrainc ilmoro beagle I could equally quote 1.2. We provide an exchange platform on www.ratesetter.com and other websites operated by or on behalf of selected partners. The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lenders, either or both of which may be individuals or companies. You confirm that when lending through the platform, you are not lending in the course of business.
3. RateSetter’s role 3.1. Our role is to operate the RateSetter platform which matches lenders with borrowers, and to facilitate credit agreements between them. We also administer and manage all aspects of these loans on your behalf.I suppose peer to peer lending is a lot like that other tech industry, the gig economy. Both exist by sidestepping regulations to get themselves in the position where they can avoid all the established costs. I'm quite sure Ubers T&Cs say their 'independent contractors' aren't employees. but UK courts have decided they are. I've already stated that they have a duty of care towards us. they can't disclaim that away in the T&Cs. They were diverting away half our interest to the provision fund whilst simultaneously being in advanced negotiations with another party to sell that provision fund. They've sold investments at par, despite being backed by a fund that theyre saying should cover 180% of the capital losses and 100% of the interest losses. If I had a bond with that, I would not be valuing it at par. Then theres the Elephant in the room. Metro owns Ratesetter. this isn't a negotiation amongst equals. this is a situation of you paying me to look after your investment, and my boss coming in wanting to do a 'fair' deal. have Ratesetter released any figures to justify the price theyve negotiated? Their wording above states The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lendersBut their T&Cs only talk about their agreement with us 16.1. We can end our agreement with you, close or suspend your RateSetter account and stop providing any servicesby giving you at least two months’ notice.16.2. We can end our agreement with you, stop providing any services and close your RateSetter account immediately and without notice if:So its still unclear to me if they can step in and unilaterally end these agreements. And finally 3.2 entering into any transfer arrangements on your behalf in order to transfer the benefit of any loans (or part thereof) to the Provision Fund, another RateSetter investor, RateSetter itself or a third party; and
I mean you could read the above as Ratesetter having the right at any time to transfer your money to me or my money to themselves. without consideration, that quite clearly isn't legal. I suppose you could argue that theres inherently a consideration in all of these transactions, but currently we are paying for a provision fund we will never be likely to use, so it doesn't seem like we are getting consideration. Investor Ts & Cs in full, not cherry-picked. www.ratesetter.com/siteassets/media/legal/01-2020-investor-terms-1.pdfDon't forget this bit of 3.1 (which you quoted but de-emphasised)... 3.1. Our role is to operate the RateSetter platform which matches lenders with borrowers, and to facilitate credit agreements between them. We also administer and manage all aspects of these loans on your behalf.You quoted part of 3.2, but forgot to quote the very first bit... 3.2. By agreeing to these Terms, you’re appointing RateSetter to act as your agent in all matters relating to the origination, negotiation, administration and management of your loans.And with that in mind, 16.1 is all that's needed. You handed your money to RS to loan out on your behalf. They're giving you two months notice that they're no longer doing that, and will repay your money.
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Post by mfaxford on Feb 22, 2021 14:14:58 GMT
And finally 3.2 entering into any transfer arrangements on your behalf in order to transfer the benefit of any loans (or part thereof) to the Provision Fund, another RateSetter investor, RateSetter itself or a third party; and
I mean you could read the above as Ratesetter having the right at any time to transfer your money to me or my money to themselves. without consideration, that quite clearly isn't legal. I suppose you could argue that theres inherently a consideration in all of these transactions, but currently we are paying for a provision fund we will never be likely to use, so it doesn't seem like we are getting consideration. Just using the part of 3.2 you've cherry picked. I think the main purpose of that is to allow the provision fund to work. If a loan that you've made is deemed to be in default then the provision fund buys that defaulted loan from you for the outstanding capital and currently owed interest. Any future returns on that defaulted loan will then go to the provision fund to help top it up. I wonder how much of the outstanding capital you'd normally get if you tried to sell a defaulted loan to someone else (probably not as much as you get from the provision fund buying it).
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beagle
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Post by beagle on Feb 22, 2021 16:30:25 GMT
@adrainc ilmoro beagle I could equally quote 1.2. We provide an exchange platform on www.ratesetter.com and other websites operated by or on behalf of selected partners. The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lenders, either or both of which may be individuals or companies. You confirm that when lending through the platform, you are not lending in the course of business.
3. RateSetter’s role 3.1. Our role is to operate the RateSetter platform which matches lenders with borrowers, and to facilitate credit agreements between them. We also administer and manage all aspects of these loans on your behalf.I suppose peer to peer lending is a lot like that other tech industry, the gig economy. Both exist by sidestepping regulations to get themselves in the position where they can avoid all the established costs. I'm quite sure Ubers T&Cs say their 'independent contractors' aren't employees. but UK courts have decided they are. I've already stated that they have a duty of care towards us. they can't disclaim that away in the T&Cs. They were diverting away half our interest to the provision fund whilst simultaneously being in advanced negotiations with another party to sell that provision fund. They've sold investments at par, despite being backed by a fund that theyre saying should cover 180% of the capital losses and 100% of the interest losses. If I had a bond with that, I would not be valuing it at par. Then theres the Elephant in the room. Metro owns Ratesetter. this isn't a negotiation amongst equals. this is a situation of you paying me to look after your investment, and my boss coming in wanting to do a 'fair' deal. have Ratesetter released any figures to justify the price theyve negotiated? Their wording above states The purpose of the platform is to facilitate the arrangement of credit agreements between borrowers and lendersBut their T&Cs only talk about their agreement with us 16.1. We can end our agreement with you, close or suspend your RateSetter account and stop providing any servicesby giving you at least two months’ notice.16.2. We can end our agreement with you, stop providing any services and close your RateSetter account immediately and without notice if:So its still unclear to me if they can step in and unilaterally end these agreements. And finally 3.2 entering into any transfer arrangements on your behalf in order to transfer the benefit of any loans (or part thereof) to the Provision Fund, another RateSetter investor, RateSetter itself or a third party; and
I mean you could read the above as Ratesetter having the right at any time to transfer your money to me or my money to themselves. without consideration, that quite clearly isn't legal. I suppose you could argue that theres inherently a consideration in all of these transactions, but currently we are paying for a provision fund we will never be likely to use, so it doesn't seem like we are getting consideration. mate end of the day you signed up to the terms. better due diligence next time. a duty of care... returning all funds? next time a regular saver might be a safer bet.
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coogaruk
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Post by coogaruk on Feb 22, 2021 17:23:49 GMT
mate end of the day you signed up to the terms. better due diligence next time. a duty of care... returning all funds? next time a regular saver might be a safer bet. Whilst I disagree with benj111 on some points, I think you are being a bit harsh. Metro Bank continued to take 50% of our interest and then within a few days of restoring it to 100% announced that they would be using the PF for their own protection and not the RS investors after all. ("...the Provision Fund has done its job..." LOL)
I feel confident that if required I will be able to convince the FOS of the unfairness in that position and to ensure reimbursement for all interest deducted by RS while under MB's ownership, the latter having already gone on record that it was distancing itself from the loanbook and leaving the risk firmly at the door of the investors.
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Post by benj111 on Feb 22, 2021 17:32:45 GMT
And finally 3.2 entering into any transfer arrangements on your behalf in order to transfer the benefit of any loans (or part thereof) to the Provision Fund, another RateSetter investor, RateSetter itself or a third party; and
I mean you could read the above as Ratesetter having the right at any time to transfer your money to me or my money to themselves. without consideration, that quite clearly isn't legal. I suppose you could argue that theres inherently a consideration in all of these transactions, but currently we are paying for a provision fund we will never be likely to use, so it doesn't seem like we are getting consideration. Just using the part of 3.2 you've cherry picked. I think the main purpose of that is to allow the provision fund to work. If a loan that you've made is deemed to be in default then the provision fund buys that defaulted loan from you for the outstanding capital and currently owed interest. Any future returns on that defaulted loan will then go to the provision fund to help top it up. I wonder how much of the outstanding capital you'd normally get if you tried to sell a defaulted loan to someone else (probably not as much as you get from the provision fund buying it). Yes that probably is the purpose, but as written they can transfer any loans to anyone for any reason without necessarily paying you. If the CEO takes a liking to your loans, tough. I hope we can agree that that isn't legal, even though that is what that passage says. Comparing what you get from the provision fund to what you get if you just sold a defaulted loan is kind of missing the point. the provision fund is basically insurance that weve already paid. all things being equal if you didn't pay for the provision fund but didn't get the cover that it provided, you'd be in about the same position as having the provision fund. My understanding of contract law is that this kind of passage is generally interpreted to include consideration, ie youre getting something in return. what are we/have we been getting in return for paying into the provision fund? because to me it suddenly became less valuable when my investment only became a 2 month thing, rather than a long term thing. beaglereturning all funds doesn't necessarily satisfy their duty of care, any more than you not getting your money back because all the borrowers defaulted necessarily means that theres a breach of their duty of care. If they lent to the type of borrowers they said they were going to, and it just happened they didn't pay the money back that isn't a breach of their duty of care. if they take insane risks lending to poor borrowers, but the borrowers just happen to pay that money back, that is probably still a breach, although proving damages may be tricky. I've read the T&Cs and quoted them. if they want to treat themselves as essentially a bank and do what they want with the money I've deposited then they can't also treat themselves as a mere middleman. They quite clearly characterise themselves as middlemen, so they should conduct themselves as such. If youre suggesting a regular saver to me, you might be missing my complaint. My ratesetter account is one of my least risky investments, the rest is in shares and trackers. I would be gobsmacked if my share dealer just handed back the money I had paid in after however many years because, for a start that doesn't reflect the actual value of the investment, and second, even though they reserve the right to sell funds, to pay fees etc, they generally understand that they are middlemen and it is my money that I am taking the risks on. would people be taking the same view if we were talking about Tesla shares bought at the start of 2020 for $80? are we lucky to be getting that money back? is it not legitimate to point out that theyre now worth $800? Because if thats fine, I've got some Theranos shares, if someone wants to pay what I paid for them.
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Greenwood2
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Post by Greenwood2 on Feb 22, 2021 17:51:54 GMT
Just using the part of 3.2 you've cherry picked. I think the main purpose of that is to allow the provision fund to work. If a loan that you've made is deemed to be in default then the provision fund buys that defaulted loan from you for the outstanding capital and currently owed interest. Any future returns on that defaulted loan will then go to the provision fund to help top it up. I wonder how much of the outstanding capital you'd normally get if you tried to sell a defaulted loan to someone else (probably not as much as you get from the provision fund buying it). Yes that probably is the purpose, but as written they can transfer any loans to anyone for any reason without necessarily paying you. If the CEO takes a liking to your loans, tough. I hope we can agree that that isn't legal, even though that is what that passage says. Comparing what you get from the provision fund to what you get if you just sold a defaulted loan is kind of missing the point. the provision fund is basically insurance that weve already paid. all things being equal if you didn't pay for the provision fund but didn't get the cover that it provided, you'd be in about the same position as having the provision fund. My understanding of contract law is that this kind of passage is generally interpreted to include consideration, ie youre getting something in return. what are we/have we been getting in return for paying into the provision fund? because to me it suddenly became less valuable when my investment only became a 2 month thing, rather than a long term thing. beagle returning all funds doesn't necessarily satisfy their duty of care, any more than you not getting your money back because all the borrowers defaulted necessarily means that theres a breach of their duty of care. If they lent to the type of borrowers they said they were going to, and it just happened they didn't pay the money back that isn't a breach of their duty of care. if they take insane risks lending to poor borrowers, but the borrowers just happen to pay that money back, that is probably still a breach, although proving damages may be tricky. I've read the T&Cs and quoted them. if they want to treat themselves as essentially a bank and do what they want with the money I've deposited then they can't also treat themselves as a mere middleman. They quite clearly characterise themselves as middlemen, so they should conduct themselves as such. If youre suggesting a regular saver to me, you might be missing my complaint. My ratesetter account is one of my least risky investments, the rest is in shares and trackers. I would be gobsmacked if my share dealer just handed back the money I had paid in after however many years because, for a start that doesn't reflect the actual value of the investment, and second, even though they reserve the right to sell funds, to pay fees etc, they generally understand that they are middlemen and it is my money that I am taking the risks on. would people be taking the same view if we were talking about Tesla shares bought at the start of 2020 for $80? are we lucky to be getting that money back? is it not legitimate to point out that theyre now worth $800? Because if thats fine, I've got some Theranos shares, if someone wants to pay what I paid for them. I have posted before that lenders have a rather ambiguous relationship with platforms particularly where we pay no fees. Borrowers are clearly 'customers' they pay fees for a service and the platform has a duty of care to them. Lenders are lenders sometimes also referred to as investors, although we have no investment or stake in the platform, a platform may have a moral duty of care, but as we pay nothing I'm not at all sure we are really customers in the legal sense. There is no growth on a P2P investment you get back (if you are lucky) the amount you put in plus interest, not at all like shares.
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coogaruk
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Post by coogaruk on Feb 22, 2021 17:59:42 GMT
I'm not at all sure we are really customers in the legal sense. There is no growth on a P2P investment you get back (if you are lucky) the amount you put in plus interest, Last September we all became customers of Metro Bank.
Hmmm, capital plus interest. Sounds like growth to me!
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Greenwood2
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Post by Greenwood2 on Feb 22, 2021 18:45:05 GMT
I'm not at all sure we are really customers in the legal sense. There is no growth on a P2P investment you get back (if you are lucky) the amount you put in plus interest, Last September we all became customers of Metro Bank.
Hmmm, capital plus interest. Sounds like growth to me!
Did we become customers of Metro, I thought they kept their distance from RS? Dividend is equivalent to interest on shares, growth is how much the share increases in value due to the increase in value of the Company (I know you understand that! ).
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coogaruk
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Post by coogaruk on Feb 22, 2021 19:01:21 GMT
Did we become customers of Metro, I thought they kept their distance from RS? Dividend is equivalent to interest on shares, growth is how much the share increases in value due to the increase in value of the Company (I know you understand that! ). Yes. Apart from owning them they've kept their distance.
If dividends are reinvested then they contribute to growth (I know you understand that! ).
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Greenwood2
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Post by Greenwood2 on Feb 22, 2021 19:37:44 GMT
Did we become customers of Metro, I thought they kept their distance from RS? Dividend is equivalent to interest on shares, growth is how much the share increases in value due to the increase in value of the Company (I know you understand that! ). Yes. Apart from owning them they've kept their distance.
If dividends are reinvested then they contribute to growth (I know you understand that! ). If interest is reinvested in P2P it becomes a sort of growth, but not associated with growth in the company, ie, in their shares. .
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Post by benj111 on Feb 22, 2021 19:50:51 GMT
@greenwood2
we do pay though?
borrowers pay a higher level of interest than we receive. I believe the portfolio overages out to 8%. some goes to ratesetter, some goes to the provision fund. we get the rest. I can't see anything that suggests the borrowers pay ratesetter a fee separately
The duty of care isn't just moral, its legal, they describe themselves as an agent in the T&Cs.
from their T&Cs 3. RateSetter’s role
3.1. Our role is to operate the RateSetter platform which matches lenders with borrowers, and to facilitate credit agreements between them. We also administer and manage all aspects of these loans on your behalf.
3.2. By agreeing to these Terms, you’re appointing RateSetter to act as your agent in all matters relating to the origination, negotiation, administration and management of your loans.
Theres no growth in bonds. they can still vary in price.
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ilmoro
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Post by ilmoro on Feb 22, 2021 20:26:52 GMT
The duty of care isn't just moral, its legal, they describe themselves as an agent in the T&Cs. In English law duty of care requires an individual to ensure a that another doesnt incur unreasonable harm or loss. I think you would struggle to argue you have incurred an unreasonable harm or loss as result of RS selling the loan book and repaying you all your money plus most of the interest. I do wonder if you actually mean the obligation to treat customers fairly as defined in the Principles of Business in the FCA Handbook
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coogaruk
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Post by coogaruk on Feb 23, 2021 12:27:48 GMT
The duty of care isn't just moral, its legal, they describe themselves as an agent in the T&Cs. I do wonder if you actually mean the obligation to treat customers fairly as defined in the Principles of Business in the FCA Handbook That's definitely where I'm coming at it from.
MB's takeover of RS was a game-changer.
Anyone who considers it fair for a bank to take 50% of investors (who are now their customers) interest on the grounds that it is to help offset any future losses they might incur but then very quickly go on to take it to use for their own protection going forward would have to be stark raving bonkers in my view.
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Post by benj111 on Feb 23, 2021 13:12:50 GMT
The duty of care isn't just moral, its legal, they describe themselves as an agent in the T&Cs. In English law duty of care requires an individual to ensure a that another doesnt incur unreasonable harm or loss. I think you would struggle to argue you have incurred an unreasonable harm or loss as result of RS selling the loan book and repaying you all your money plus most of the interest. I do wonder if you actually mean the obligation to treat customers fairly as defined in the Principles of Business in the FCA Handbook If i open a book at the grand national. offering the best odds. Except if you win i only give you the money back that you paid. (inline with the T&Cs) have you not incurred a loss? If I refund you your £2 for your winning lottery ticket? I gave the example with the Tesla shares. Youre ignoring the risk already taken, in April we will hopefully be coming out of the end of the final lockdown, there is the light at the end of the tunnel. we have borne that risk throughout. If Ratesetter had guaranteed the investment, if there was no risk to us, that makes some difference, as it stands we took a capital risk, merely giving us our money back isn't necessarily adequate compensation. If Ratesetter want to justify why an investment paying well over current market rates, with a supposedly over provisioned, provision fund, is only worth face value, then they are welcome to. until then I will call them out on it.
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