SteveT
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Post by SteveT on Mar 24, 2021 16:29:40 GMT
The exit account is a mechanism for AC to avoid complaints and litigation, I assume. Anything else doesn’t make sense. But this is P2P and AC so no makes-sense-guarantees. Creating an SM for a EA in runoff would just be dicing with further potential complaints and litigation threats. If AC have got their head screwed on they should stick with two simple options - AAs that will have lender consent to resume new lending and give the account some semblance of return to what it originally was - EA (exit account): its own ring-fenced dedicated PF in proportion at cutoff and then under its own steam, no new lending, no proportionally funding development tranches, AC to sell tradeable loan parts in SM as and when liquidity allows, slow long drawn out process for the rump that will be between 10% and 20%. Combine those with - IMPECCABLE communication of the two options to lenders so there can be no valid misunderstandings - NEAR 100% CERTAINTY that there’s no FCA, FOS comeback from executing the above. Also should treat any lender’s decision to opt for the Exit Account as acknowledgment they hadn’t really taken on board the Access Account T&Cs and/or answered the AC Lender Appropriateness Test questions truthfully. Therefore conclude that P2P is not appropriate for their risk appetite (ie. prevent future new lending on AC)
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dave4
Member of DD Central
Cynical is a hobby not a lifestyle
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Post by dave4 on Mar 24, 2021 17:32:42 GMT
I agree. but..
Will end the hotel California issue. for some.
Then AC can't boast about the gazillion accounts, and being the biggest ect
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Post by Harland Kearney on Mar 24, 2021 17:34:07 GMT
I am exiting AC's AA's, but I wouldn't dream of going into a GBBA 3. For the fool hardy?
At the rate of repayments, most investors will be out by simplying holding into the AA's and withdrawing as repayments. (and new money, because somebody is buying this of me, why I don't know?)
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alender
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Post by alender on Mar 24, 2021 19:10:32 GMT
I am exiting AC's AA's, but I wouldn't dream of going into a GBBA 3. For the fool hardy? At the rate of repayments, most investors will be out by simplying holding into the AA's and withdrawing as repayments. (and new money, because somebody is buying this of me, why I don't know?) I agree with you about GBBA3, an account where AC have no interest in making it work for investors and in fact may well punish people who dare to leave AC, who know what new rules changes will happen.
I think what AC are trying/going to do is stop AA investors getting out by simply holding onto their AA accounts with withdraw all set, their aim is to hold onto as much money as possible, you either go into a new lending account with very little access or a zombie account where AC have no interest. The one thing we can be certain off is AC will keep changing the rules/moving the goal posts whenever it suit them. This is something I predicted at the start of this crisis but is now taking place in a different form, the AA holders are either going to have to enter a zombie account or go into a Hotel California type of account. Either is fine if you bought into these but we did not, we bought into Access Accounts.
Be interesting what the FCA will make of this, it will take a time but will probably get to them via the FOM. There are FCA rules in Fairness of variation terms in UK financial services consumer contracts, one of the rules for a variation is
Whether the customer will have "freedom to exit", contractually and practically
Of course it will be up to the FCA or court of law to determine if this is a variation
Also another term
Whether the consumer understands the consequences of a future variation at the time the contract is concluded
For those who have not renewed their Lender Certification might just have a case, if so there has to be freedom to exit.
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Post by df on Mar 24, 2021 19:13:44 GMT
I am exiting AC's AA's, but I wouldn't dream of going into a GBBA 3. For the fool hardy? At the rate of repayments, most investors will be out by simplying holding into the AA's and withdrawing as repayments. (and new money, because somebody is buying this of me, why I don't know?) They said "A small number of Access Account investors have told us that they do not wish to participate in new lending". I fail to see any logic behind this minority wish. Either stay or go, both goals are easy to achieve. Why would anyone want to go for "GBBA3" option?
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iRobot
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Post by iRobot on Mar 24, 2021 19:32:14 GMT
I am exiting AC's AA's, but I wouldn't dream of going into a GBBA 3. For the fool hardy? At the rate of repayments, most investors will be out by simplying holding into the AA's and withdrawing as repayments. (and new money, because somebody is buying this of me, why I don't know?) They said "A small number of Access Account investors have told us that they do not wish to participate in new lending". I fail to see any logic behind this minority wish. Either stay or go, both goals are easy to achieve. Why would anyone want to go for "GBBA3" option? Tend to agree df, it seems like an odd move to me, too. Rather than speculate, I'll await AC's description of the mechanics of the Exit Account; with a bit of luck its' purpose will then become apparent.
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Post by df on Mar 24, 2021 20:12:56 GMT
I am exiting AC's AA's, but I wouldn't dream of going into a GBBA 3. For the fool hardy? At the rate of repayments, most investors will be out by simplying holding into the AA's and withdrawing as repayments. (and new money, because somebody is buying this of me, why I don't know?) ...This is something I predicted at the start of this crisis but is now taking place in a different form, the AA holders are either going to have to enter a zombie account or go into a Hotel California type of account. Either is fine if you bought into these but we did not, we bought into Access Accounts... There's no "Hotel California" for AA's. If you want to leave you can either wait for your withdrawal requests to realise (still receiving the interest) or exit immediately @-0.1%. "Zombie account" is an option for those who want to stay.
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ashtondav
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Post by ashtondav on Mar 24, 2021 20:21:28 GMT
Despite all the whining I can’t see anyone moving to the exit account. The only sensible option is to sell at a fee of £10 per £10,000.
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Post by oppsididitagain on Mar 24, 2021 20:35:54 GMT
Definitely poorer returns. I would sell now as discounts may widen once peeps get to grips with this new “exit” account. I was thinking that but I would presume AC would give us the option to move our money between the accounts for 'free' Hopefully the will be an incentive via a promo rate or a better predicted return.
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alender
Member of DD Central
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Post by alender on Mar 24, 2021 20:43:41 GMT
To avoid potential complaints and potential threats of litigation which is never great for a business and especially if the business shot itself in one foot (ie the pro-rata blunder) - 1) AC can’t resume lending whilst a single lender objects to new lending given instant access isn’t available and hasn’t been available for a year (and this is regardless of caveats in T&C’s, just not worth the hassle and risk of facing down challenges) 2) AC can’t force lenders to sell at a discount even a nominal 0.1% 3) AC can’t favour a single lender and just let them withdraw 100% instantly as it unfair to the remaining lenders and would allow them to demand instant access withdrawal. How do you square the above? Offer lenders the option of sticking with AAs and consenting to resumption of new lending or choosing to go into exit accounts. Probably puts AC on stronger footing against complaints as it’s “fair” to all lenders. Crazy? Scary? Yes, and that’s just the crowd who are supposed to be on the same side. At least with borrowers and platforms there was less confusion about potential misalignment of interests! Welcome to the democratisation of finance! All the disadvantages of partisan division and sometimes nothing less than a 100% majority is enough. These are problems of AC's own making, by creating the SM that cut off all new money to the AAs therefore only leaving what is left of repayments to fund the withdraws, of course at the beginning of the crisis very few people would be adding to the AAs but there were some (ISA season) plus the ones reinvesting the interest, now there would be a lot more. Also because of the discounts money left the AAs in withdrawals to buy back in at a discount (including interest payments) but as they bought on the SM no new money and the accounts continue to shrink. Also if AC had not been hoarding vast quantitates of lenders cash for most of the time since lock in the SM discounts would have reduced a time ago, as those wishing to stay recycled this back in via the SM. Rates could have been increased with no cost to AC. However confidence was lost in AC doing the right thing and returning the cash which it could reasonable do so. Treating their largest lenders as second class (during the Flat rate period) is never going to go well for a Financial institution that replies on new money to make it accounts work as they should.
However the SM did work well for those who need cash quickly and those who want to invest.
There now seems to be a bit of an impasse with new lenders not prepared to buy in at par and existing lenders not prepared to sell out at a discount.
Now the issues for AC when they make these changes (email did not state this is an option)
Is this consider a variation in terms, if so AC will have to pay off lenders at par and not keep their money locked in, may take a time to go through the FOM but they will get to this at some point. Those who traded out on the SM will also have a case.
At any time if AC spook the SM by changing the rules there may be some liability again the FOM will decide. Who is going to invest much in the new lending accounts with very limited access (less than current levels) at the 4%-5%ish level, very unlikely to be the large investors who are the most vital to AC
These are just some of the issues.
Sooner of probably later the FOM and FCA will look at all of the changes made to the AAs and who knows they could decide even just one of the variation in terms is not fair to lenders then there is a real problem as AC will be forced to not only pay all investments back at par, recompense for losses for those who sold on the SM but also pay out compensation.
There is talk of responsibilities, how about AC responsibility to return as much money as possible to the lenders, after all these were sold as access accounts.
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johni
Member of DD Central
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Post by johni on Mar 25, 2021 16:11:35 GMT
To avoid potential complaints and potential threats of litigation which is never great for a business and especially if the business shot itself in one foot (ie the pro-rata blunder) - 1) AC can’t resume lending whilst a single lender objects to new lending given instant access isn’t available and hasn’t been available for a year (and this is regardless of caveats in T&C’s, just not worth the hassle and risk of facing down challenges) 2) AC can’t force lenders to sell at a discount even a nominal 0.1% 3) AC can’t favour a single lender and just let them withdraw 100% instantly as it unfair to the remaining lenders and would allow them to demand instant access withdrawal. How do you square the above? Offer lenders the option of sticking with AAs and consenting to resumption of new lending or choosing to go into exit accounts. Probably puts AC on stronger footing against complaints as it’s “fair” to all lenders. Crazy? Scary? Yes, and that’s just the crowd who are supposed to be on the same side. At least with borrowers and platforms there was less confusion about potential misalignment of interests! Welcome to the democratisation of finance! All the disadvantages of partisan division and sometimes nothing less than a 100% majority is enough. These are problems of AC's own making, by creating the SM that cut off all new money to the AAs therefore only leaving what is left of repayments to fund the withdraws, of course at the beginning of the crisis very few people would be adding to the AAs but there were some (ISA season) plus the ones reinvesting the interest, now there would be a lot more. Also because of the discounts money left the AAs in withdrawals to buy back in at a discount (including interest payments) but as they bought on the SM no new money and the accounts continue to shrink. Also if AC had not been hoarding vast quantitates of lenders cash for most of the time since lock in the SM discounts would have reduced a time ago, as those wishing to stay recycled this back in via the SM. Rates could have been increased with no cost to AC. However confidence was lost in AC doing the right thing and returning the cash which it could reasonable do so. Treating their largest lenders as second class (during the Flat rate period) is never going to go well for a Financial institution that replies on new money to make it accounts work as they should.
However the SM did work well for those who need cash quickly and those who want to invest.
There now seems to be a bit of an impasse with new lenders not prepared to buy in at par and existing lenders not prepared to sell out at a discount.
Now the issues for AC when they make these changes (email did not state this is an option)
Is this consider a variation in terms, if so AC will have to pay off lenders at par and not keep their money locked in, may take a time to go through the FOM but they will get to this at some point. Those who traded out on the SM will also have a case.
At any time if AC spook the SM by changing the rules there may be some liability again the FOM will decide. Who is going to invest much in the new lending accounts with very limited access (less than current levels) at the 4%-5%ish level, very unlikely to be the large investors who are the most vital to AC
These are just some of the issues.
Sooner of probably later the FOM and FCA will look at all of the changes made to the AAs and who knows they could decide even just one of the variation in terms is not fair to lenders then there is a real problem as AC will be forced to not only pay all investments back at par, recompense for losses for those who sold on the SM but also pay out compensation.
There is talk of responsibilities, how about AC responsibility to return as much money as possible to the lenders, after all these were sold as access accounts.
Unlike people shooting from the hip AC will have gone through legal with regards t & c changes. I wouldn't be surprised if the FoA havent been consulted prior to changes. But in 12 to 18 months time we may find out
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alibaba
Member of DD Central
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Post by alibaba on Mar 25, 2021 16:43:39 GMT
These are problems of AC's own making, by creating the SM that cut off all new money to the AAs therefore only leaving what is left of repayments to fund the withdraws, of course at the beginning of the crisis very few people would be adding to the AAs but there were some (ISA season) plus the ones reinvesting the interest, now there would be a lot more. Also because of the discounts money left the AAs in withdrawals to buy back in at a discount (including interest payments) but as they bought on the SM no new money and the accounts continue to shrink. Also if AC had not been hoarding vast quantitates of lenders cash for most of the time since lock in the SM discounts would have reduced a time ago, as those wishing to stay recycled this back in via the SM. Rates could have been increased with no cost to AC. However confidence was lost in AC doing the right thing and returning the cash which it could reasonable do so. Treating their largest lenders as second class (during the Flat rate period) is never going to go well for a Financial institution that replies on new money to make it accounts work as they should.
However the SM did work well for those who need cash quickly and those who want to invest.
There now seems to be a bit of an impasse with new lenders not prepared to buy in at par and existing lenders not prepared to sell out at a discount.
Now the issues for AC when they make these changes (email did not state this is an option)
Is this consider a variation in terms, if so AC will have to pay off lenders at par and not keep their money locked in, may take a time to go through the FOM but they will get to this at some point. Those who traded out on the SM will also have a case.
At any time if AC spook the SM by changing the rules there may be some liability again the FOM will decide. Who is going to invest much in the new lending accounts with very limited access (less than current levels) at the 4%-5%ish level, very unlikely to be the large investors who are the most vital to AC
These are just some of the issues.
Sooner of probably later the FOM and FCA will look at all of the changes made to the AAs and who knows they could decide even just one of the variation in terms is not fair to lenders then there is a real problem as AC will be forced to not only pay all investments back at par, recompense for losses for those who sold on the SM but also pay out compensation.
There is talk of responsibilities, how about AC responsibility to return as much money as possible to the lenders, after all these were sold as access accounts.
I would be happy to sell at a discount I have 37k stuck in the AA I can only sell £41.00 at a discount. Unlike people shooting from the hip AC will have gone through legal with regards t & c changes. I wouldn't be surprised if the FoA havent been consulted prior to changes. But in 12 to 18 months time we may find out
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ceejay
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Post by ceejay on Mar 25, 2021 17:01:34 GMT
Unlike people shooting from the hip AC will have gone through legal with regards t & c changes. I wouldn't be surprised if the FoA havent been consulted prior to changes. But in 12 to 18 months time we may find out I think you may have been caught out by the intricacies of the forum's quoting process but I think what you added was I would be happy to sell at a discount I have 37k stuck in the AA I can only sell £41.00 at a discount.... which I think you may need to explain! If you've served your 30d/90d notice then why can't you sell? I just cleared one of my accounts out at -0.1%
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alibaba
Member of DD Central
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Post by alibaba on Mar 25, 2021 17:50:27 GMT
I think you may have been caught out by the intricacies of the forum's quoting process but I think what you added was I would be happy to sell at a discount I have 37k stuck in the AA I can only sell £41.00 at a discount.... which I think you may need to explain! If you've served your 30d/90d notice then why can't you sell? I just cleared one of my accounts out at -0.1% Hi Ceejay, I have not been keeping up to date with AC and their constant manoeuvres, I gather from what you have said that I have to transfer the money from AA to the 30 or 90 day account before I can sell at a discount, I am a little perplexed why when I log into the AA account does it say that I can sell £41.
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dead-money
Rocket to the Moon
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Post by dead-money on Mar 25, 2021 18:52:24 GMT
I think you may have been caught out by the intricacies of the forum's quoting process but I think what you added was I would be happy to sell at a discount I have 37k stuck in the AA I can only sell £41.00 at a discount.... which I think you may need to explain! If you've served your 30d/90d notice then why can't you sell? I just cleared one of my accounts out at -0.1% Hi Ceejay, I have not been keeping up to date with AC and their constant manoeuvres, I gather from what you have said that I have to transfer the money from AA to the 30 or 90 day account before I can sell at a discount, I am a little perplexed why when I log into the AA account does it say that I can sell £41. No quite the opposite, you transfer from 30D / 90D to QAA to then sell at 0.1% discount or less.
If you're unclear on the process contact AC customer support via phone or chat.
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