ilmoro
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'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 Aug 29, 2021 9:22:48 GMT
Assistance Required Regarding FCA Statement
The FCA is hitting back, by stating that “ We [the FCA] have been very clear that P2P loans are a higher risk form of investment, rather than, say, a savings product.” Can any lender please post, or IM me when the FIRST TIME they came across any such warning, absolutely anywhere (preferably and specifically from the FCA) that stated along the lines, “ P2P loans are a higher risk of investment, rather than a savings product”. We absolutely need this info/date as this is one of the erroneous assertions that the FCA is making against the lenders to defend their [the FCA] position. I am certainly aware that I never saw such a warning in the early years of P2P, I need to know when the first time it was brought to the attention of retail clients. Many thx to everyone for racking your brains over this. FSAG Question is where are you & the FCA expecting people to have seen such statements? Its quite clear in all their discussions, consultations etc that the FCA regarded and stated that P2P was higher risk than traditional deposits & investments but that would only be seen by a very niche group. Its a if a tree falls in a forest scenario ... the stories are out there but was anyone looking? Certainly the FCA do not appear to have put much emphasis on the risk element in their press releases regarding initial regulation www.fca.org.uk/news/press-releases/financial-conduct-authority-outlines-how-it-will-regulate-crowdfundingwww.fca.org.uk/news/press-releases/financial-conduct-authority-places-consumer-protection-heart-crowdfundingHowever, then you have FCA comments reported here www.theguardian.com/money/2014/feb/15/peer-to-peer-lending-nicola-horlickThe FCA reckons that referring to the lender investors who use these sites as "savers" may be "problematic" because peer-to-peer is "higher risk" than putting your money in a savings account.
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scooter
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Post by scooter on Aug 29, 2021 9:58:12 GMT
Assistance Required Regarding FCA Statement
The FCA is hitting back, by stating that “ We [the FCA] have been very clear that P2P loans are a higher risk form of investment, rather than, say, a savings product.” Can any lender please post, or IM me when the FIRST TIME they came across any such warning, absolutely anywhere (preferably and specifically from the FCA) that stated along the lines, “ P2P loans are a higher risk of investment, rather than a savings product”. We absolutely need this info/date as this is one of the erroneous assertions that the FCA is making against the lenders to defend their [the FCA] position. I am certainly aware that I never saw such a warning in the early years of P2P, I need to know when the first time it was brought to the attention of retail clients. Many thx to everyone for racking your brains over this. FSAG Question is where are you & the FCA expecting people to have seen such statements? Its quite clear in all their discussions, consultations etc that the FCA regarded and stated that P2P was higher risk than traditional deposits & investments but that would only be seen by a very niche group. Its a if a tree falls in a forest scenario ... the stories are out there but was anyone looking? Certainly the FCA do not appear to have put much emphasis on the risk element in their press releases regarding initial regulation www.fca.org.uk/news/press-releases/financial-conduct-authority-outlines-how-it-will-regulate-crowdfundingwww.fca.org.uk/news/press-releases/financial-conduct-authority-places-consumer-protection-heart-crowdfundingHowever, then you have FCA comments reported here www.theguardian.com/money/2014/feb/15/peer-to-peer-lending-nicola-horlickThe FCA reckons that referring to the lender investors who use these sites as "savers" may be "problematic" because peer-to-peer is "higher risk" than putting your money in a savings account. CP13/13 The FCA’s regulatory approach to crowdfunding (and similar activities) Oct 2014 Summary of our proposals
1.13 Crowdfunding is a term that encompasses a range of business models. With some models,
100% capital loss is more likely than not, but others appear more benign. However, making
any investment via crowdfunding platforms does tend to involve higher risks than those that
apply to more traditional investments and deposits. Our approach reflects this – we aim to
provide appropriate and proportionate consumer protection and standards that can be applied
fairly to differing types of firm.
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Post by fsbloke on Aug 29, 2021 19:40:51 GMT
Mucho, whilst I hope you get the answers to that question I'm not so sure that is totally relevent nor the crux, certainly, of my complaint.
I, like many on these forums, submitted a complaint to the FCA. Mine concentrated on the lack of FCA intervention as a result of the audit carried out in Oct 2019.
Extract from my complaint...
".... It would now appear, according to the administrator, that serious failures/shortcomings have occurred and been discovered during their initial investigations. No "Wind Down" plan, nor financing of such, was in place at all to protect investors. Client money account status was unclear and challenged by the administrator (contrary to the company's claims on the website), and although subsequently withdrawn, caused me considerable concern at the time. The external audit carried in Oct 2019 identified several major issues with FS and should have resulted, in my opinion, in the FCA stepping in and stopping trading completely until such issues were resolved, in accordance with their mandate "We supervise how firms work and can stop those that don’t meet our standards from carrying out the activities we regulate." The CMAR reports since that time, i.e. Oct 2019, should have alerted the FCA (with ample opportunity) to serious shortcomings in Funding Secure's operational and financial weaknesses yet they continued to operate under that FCA approval which, in my opinion, was a serious oversight and therefore negligent of the regulator."
The matter of whether P2P is/was a more riskier investment v savings accounts is NOT the issue. Of course it is more risky (what isn't?)
It is the matter regarding lack of action that should be questioned, which then leads us to regulator incompetence/negligence. Hence the deflection tactic.
Don't fall for it.
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iRobot
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Post by iRobot on Aug 29, 2021 20:25:29 GMT
[Some of this is a repeat of other posts in this thread but as Magnus used to say: I've started so I'll finish...] Earliest FCA doc I have a link to is this 10/2013 piece: " The Financial Conduct Authority outlines how it will regulate crowdfunding" - I know, I know: "regulate"! -- " Consumers need to be clear on what they’re getting into and what the risks of crowdfunding are." -- "Any comparison of a peer-to-peer loan interest rate with a regular savings account interest rate must be fair, clear and not misleading." Those two extracts don't mention 'risk' and 'savings product' in same breath, but it does serve to illustrate a point. **I suspect that, if challenged, the FCA will adopt a position of: 'we regulate the firms and structure that regulation such that those financial firms are obliged to deliver our message to the consumer'. The earliest I can find the FCA mentioning risks and savings in loosely the same breath is an 11/2015 'request for comment' document which was issued as a precursor to changes in legislation; including allowing IFISAs. Here we have: -- " 1.3 This paper will be of interest to: consumers and consumer organisations [amongst others]" -- " 1.12 We have undertaken an equality impact assessment and consider that loan-based crowdfunding platforms generally, and access to them via IFISAs, may carry particular risks for some people with protected characteristics under the Equalities Act 2010 such as: [...] Individuals in retirement, who may have significant sums in savings and may be concerned about low interest rates. This may lead them to search for higher yields elsewhere, which in turn may lead them to invest significant amounts in loan-based crowdfunding platforms, potentially taking inappropriate levels of risk with their money." There are numerous other documents of a similar ilk; those requesting comments and also those reporting on the aggregated responses to those requests. All of the ones I have read do mention the FCAs concerns about consumers not understanding the risks and being financially over-exposed. Perhaps the question to the FCA should be: 'If you first had these concerns in 2013, why do you still have them in 2021? What has failed? Has it been the FCAs ability to communicate those concerns effectively and also educate - and thereby protect - consumers adequately?' **There a further comment in the 2015 document linked above: -- " 1.13 To mitigate these risks, we propose to focus in particular on the quality of firms’ disclosure, including financial promotions, to ensure that risks are adequately disclosed."
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michaelc
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Post by michaelc on Aug 29, 2021 21:18:12 GMT
In my very humble opinion, I don't understand the relevance of whether or not Joe Blogs was informed that p2p is/was more risky than a "savings product". To the laymen such as me I understand "savings product" to mean a regular savings account at a bank or building society backed up by the fscs.
There was never any doubt for me that p2p was far riskier than a savings product whether or not the fca told me so. I imagined it to be slightly more risky than individual stocks and shares. I thought if the property market went belly up I could be in for some serious losses. I didn't expect to be potentially on the hook for more than I invested and I didn't expect any fraud/theft to take place from the platform itself. i.e. it turned out my biggest risk was the people running the platform - I did not expect that.
Stocks and other "vehicles" can be traded through a broker who usually has fscs protection so the risk is absolutely with the investment and not with the platform. I knew p2p platforms don't have fscs protection but thought that was somewhat of a detail as unless the platforms themselves were out and out thieves and con-men (which I thought unlikely given fca regulation) it shouldn't make much difference
I am not at all upset that I wasn't given a clear indication as to how risky it is or was. I generally don't like regulation when it gets to the stage of people being compensated because they weren't given the correct advice (advice the tax payer is supposed to pay for).
I do think the fca has a duty though to regulate which is something I don't consider its done. In one case (COL) it didn't even bother to provide accurate information as to whether the company was regulated or not. In several others it should try a damn site harder ensuring those running these companies are fit and proper.
I wonder if those behind the fscs who by definition have to provide hard cash upon failure, try a bit harder than the FCA when evaluation "platform risk" ?
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Post by portlandbill on Aug 30, 2021 7:14:08 GMT
I always knew that there was a risk that the value of my investment could go down as well as up. I didn't know that the FCA were going to stand by while my investment was stolen.
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Post by Badly Drawn Stickman on Aug 30, 2021 7:34:11 GMT
I always knew that there was a risk that the value of my investment could go down as well as up. I didn't know that the FCA were going to stand by while my investment was stolen. Did they just stand by? Many would argue their incompetence when they actively became involved enabled the situation to become even more disastrous.
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adrian77
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Post by adrian77 on Aug 30, 2021 11:15:27 GMT
the above is only a section of the concerns and this is appalling - how the hell can any investor have confidence in a company that lent against "secure" assets when it was not even clear who owned the damn things - totally agree they should have stepped in and actually done something much earlier - simply stating there were risks is insulting, patronising and irrelevant!
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r1200gs
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Post by r1200gs on Aug 30, 2021 13:28:41 GMT
the above is only a section of the concerns and this is appalling - how the hell can any investor have confidence in a company that lent against "secure" assets when it was not even clear who owned the damn things - totally agree they should have stepped in and actually done something much earlier - simply stating there were risks is insulting, patronising and irrelevant!I absolutely agree, it is beyond pathetic that the FCA should try to lay the blame on us for ignoring their warning! We all knew this was not a savings account, but the real losses come from the FCA allowing deception, fraud, shoddy business practices galore! The FCA could see all of this just by looking, yet they put their seal of approval on this! "Look for the FCA logo"!
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Aug 31, 2021 10:20:17 GMT
It is the Government which encouraged the general public to invest in these platforms by creating the Innovative Finance Individual SAVINGS Account. To suggest that the man in the street should be expected to see every pronouncement by the FCA is quite ridiculous.
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pfffill
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Post by pfffill on Sept 1, 2021 4:22:06 GMT
I wholeheartedly agree with the sentiments expressed above by several parties, but I fear that the FCA is teeing up for a complete weasel rejection of such arguments under the banner of 'not within our remit' and/or 'technicalities'. This makes it very important that sustained pressure is applied where it can be (MPs, Press, direct correspondence etc) by the CC and by FSAG as a whole.
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adrian77
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Post by adrian77 on Sept 1, 2021 9:02:27 GMT
surely not !
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Mucho P2P
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Post by Mucho P2P on Sept 3, 2021 13:10:38 GMT
It is the Government which encouraged the general public to invest in these platforms by creating the Innovative Finance Individual SAVINGS Account. To suggest that the man in the street should be expected to see every pronouncement by the FCA is quite ridiculous. That is why we have specifically asked the FCA "where and when" ALL these warnings were purportedly given to the retail clients. We have not yet received a reply!
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Greenwood2
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Post by Greenwood2 on Sept 7, 2021 7:06:06 GMT
It is the Government which encouraged the general public to invest in these platforms by creating the Innovative Finance Individual SAVINGS Account. To suggest that the man in the street should be expected to see every pronouncement by the FCA is quite ridiculous. That is why we have specifically asked the FCA "where and when" ALL these warnings were purportedly given to the retail clients. We have not yet received a reply! Wasn't that delegated to the platforms? Risk warnings and lender tests, 10% limit on retail investment, etc. I can't think of any other way to reach all lenders or potential lenders.
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Mucho P2P
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Post by Mucho P2P on Sept 7, 2021 8:50:48 GMT
That is why we have specifically asked the FCA "where and when" ALL these warnings were purportedly given to the retail clients. We have not yet received a reply! Wasn't that delegated to the platforms? Risk warnings and lender tests, 10% limit on retail investment, etc. I can't think of any other way to reach all lenders or potential lenders. It was delegated to the platforms AFTER the Lendy and FundingSecure collapse, which was way too late for lenders in those companies. The FCA imply they have been warning lenders for a long time, hence our queries to them of "where and when?".
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