taffy
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Post by taffy on Apr 10, 2021 9:15:01 GMT
I now realise my error in evaluating the risks of lending through Funding Secure.
Anticipated investment losses due to
1. Borrower going bankrupt.
2. Rare overvaluation of security.
3. Security being stolen.
4. Security taken out of storage unauthorised.
5. Increased return and risk by lacking diversification.
Actual investment losses.
1. Lending to a bankrupt.
2. Majority of valuations inflated.
3. Taking stolen goods as security.
4. Security never entered into storage
5. Undisclosed common borrowers.
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adrian77
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Post by adrian77 on Apr 10, 2021 10:15:54 GMT
A good summary may I add 2 more
1) borrower never intending to repay the FS loan due to pre-planned bankruptcy allied with siphoning off of non-audited funds out of business
2) FS director(s) not being exactly honest regarding status of loans etc (and it is a big etc!)
I had huge hopes for P2P but as I see it the providers have nothing to lose if things go pear-shaped - it is not their money they are risking/helping themselves to.
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benaj
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Post by benaj on Apr 10, 2021 10:31:20 GMT
Certainly, I underestimated a couple of things.
a) lending via firms registered with the FCA do not reduce risk.
b) firms can go into administration / vanished anytime they want.
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11025
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Post by 11025 on Apr 10, 2021 11:26:56 GMT
Certainly, I underestimated a couple of things. a) lending via firms registered with the FCA do not reduce risk. b) firms can go into administration / vanished anytime they want. That does appear to be the case But FCA registered/authorised firms were supposed to have a wind-down plan , weren't they ?
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benaj
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Post by benaj on Apr 10, 2021 11:44:08 GMT
Certainly, I underestimated a couple of things. a) lending via firms registered with the FCA do not reduce risk. b) firms can go into administration / vanished anytime they want. That does appear to be the case But FCA registered/authorised firms were supposed to have a wind-down plan , weren't they ? I haven’t seen any new measures from FCA to prevent another COL style failure. The wind-down plan is only a plan without being trialled and tested.
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iRobot
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Post by iRobot on Apr 10, 2021 11:54:50 GMT
Certainly, I underestimated a couple of things. a) lending via firms registered with the FCA do not reduce risk. b) firms can go into administration / vanished anytime they want. And what I find frustrating, verging on annoying, is that 'Wind Down Plans' count for nothing. An FCA requirement and touted by platforms as being a safety net wrapped in a comfort blanket, it would appear they're the anthesis of 'the Ronseal paradigm' and achieve precisely nothing of what is stated on the tin.
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11025
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Post by 11025 on Apr 10, 2021 12:09:45 GMT
Certainly, I underestimated a couple of things. a) lending via firms registered with the FCA do not reduce risk. b) firms can go into administration / vanished anytime they want. And what I find frustrating, verging on annoying, is that 'Wind Down Plans' count for nothing. An FCA requirement and touted by platforms as being a safety net wrapped in a comfort blanket, it would appear they're the anthesis of 'the Ronseal paradigm' and achieve precisely nothing of what is stated on the tin. Totally agree , it would appear this is part of the FCA Principles of business and you would imagine the 4A authorisation procedure ... FCA_2016_79.pdf (133.77 KB)
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Apr 10, 2021 13:44:58 GMT
Certainly, I underestimated a couple of things. a) lending via firms registered with the FCA do not reduce risk. b) firms can go into administration / vanished anytime they want. FCA "Authorised & Regulated" actually increases Risk, by quite a margin, because it immediately bestows a completely false "Halo" upon the firm in question. The FCA have a LOT to answer for, especially their undoubted 100% culpability for destroying Lender's invested savings in Collateral. After their numerous, documented & proven gross incompetencies being responsible for and laying waste to so many people's investments, you gotta wonder how the FCA Board and Senior Management possibly sleep at night? These are the sort of people we are dealing with, and gives a V good indication IMHO of the general FCA "attitude." As if most of us aren't already aware.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Apr 10, 2021 13:50:08 GMT
A good summary may I add 2 more 1) borrower never intending to repay the FS loan due to pre-planned bankruptcy allied with siphoning off of non-audited funds out of business 2) FS director(s) not being exactly honest regarding status of loans etc (and it is a big etc!) I had huge hopes for P2P but as I see it the providers have nothing to lose if things go pear-shaped - it is not their money they are risking/helping themselves to. And I believe, that the FCA, in their infinite incompetent wisdom, prevent Platforms from having "skin in the game."? Only Commercial Sector Rejects could dream that one up.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 10, 2021 15:56:43 GMT
A good summary may I add 2 more 1) borrower never intending to repay the FS loan due to pre-planned bankruptcy allied with siphoning off of non-audited funds out of business 2) FS director(s) not being exactly honest regarding status of loans etc (and it is a big etc!) I had huge hopes for P2P but as I see it the providers have nothing to lose if things go pear-shaped - it is not their money they are risking/helping themselves to. And I believe, that the FCA, in their infinite incompetent wisdom, prevent Platforms from having "skin in the game."? Only Commercial Sector Rejects could dream that one up. Nope, that would be HoP as the FCA rules derive from the legislation. All sorts of dangers from allowing balance sheet lending so actually very sensible. That said clever platforms have found ways found it by utilising group companies or partners to have skin in the game so there is some alignment of interests with lenders
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adrian77
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Post by adrian77 on Apr 10, 2021 16:15:26 GMT
can we have an example - I thank you
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Post by Ace on Apr 10, 2021 16:44:50 GMT
can we have an example - I thank you Kuflink
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Post by df on Apr 10, 2021 16:59:32 GMT
can we have an example - I thank you Loanpad use partners who invest in each loan.
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dave4
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Cynical is a hobby not a lifestyle
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Post by dave4 on Apr 10, 2021 17:25:28 GMT
Capitol Rise i believe also have
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Apr 10, 2021 18:26:26 GMT
And I believe, that the FCA, in their infinite incompetent wisdom, prevent Platforms from having "skin in the game."? Only Commercial Sector Rejects could dream that one up. Nope, that would be HoP as the FCA rules derive from the legislation.
All sorts of dangers from allowing balance sheet lending so actually very sensible. That said clever platforms have found ways found it by utilising group companies or partners to have skin in the game so there is some alignment of interests with lenders Gotta disagree ilmoro. The FCA could, for instance, require, say, 5% Platform investment per Loan? No end of preventable problems have been directly caused by this singularly stupid restriction. IMHO.
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