shimself
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Post by shimself on Sept 11, 2021 10:22:15 GMT
I'm having a quarrel with a platform for having put up a loan proposition to a borrower who didn't exist, thus losing my investment
Has anyone heard of this happening ever on any platform, before or since? (REBS is the guilty party)
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registerme
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Post by registerme on Sept 11, 2021 11:49:46 GMT
I've not heard of another example along those lines. You'd think that KYC / AML systems and processes would prevent such a thing.
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Post by df on Sept 11, 2021 11:50:26 GMT
I'm having a quarrel with a platform for having put up a loan proposition to a borrower who didn't exist, thus losing my investment Has anyone heard of this happening ever on any platform, before or since? (REBS is the guilty party) I'll never forget that A rated Rebs loan. I think there might be some on FS with similar scenarios, but we don't know yet.
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scooter
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Post by scooter on Sept 11, 2021 16:18:26 GMT
Crowd2fund gave a loan to a fraudster who applied using a proper company name which he had no association with. They reported themselves to the FCA but I don't think they were ever told to repay everyone.
Sounds like one for the FO. The FCA is quite clear about due diligence and best interest.
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Greenwood2
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Post by Greenwood2 on Sept 11, 2021 20:03:30 GMT
I seem to remember a platform repaying lenders on a fraudulent loan, but just as a goodwill gesture, and I don't remember which platform (getting old).
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hazellend
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Post by hazellend on Sept 11, 2021 20:58:34 GMT
I've not heard of another example along those lines. You'd think that KYC / AML systems and processes would prevent such a thing. Lendy did it and lost almost 2 million
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Sept 11, 2021 21:19:38 GMT
I seem to remember a platform repaying lenders on a fraudulent loan, but just as a goodwill gesture, and I don't remember which platform (getting old). Did you invest in the first C property loan?
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Post by df on Sept 11, 2021 23:04:12 GMT
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michaelc
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Post by michaelc on Sept 13, 2021 19:53:38 GMT
I seem to remember a platform repaying lenders on a fraudulent loan, but just as a goodwill gesture, and I don't remember which platform (getting old). I'm getting old too but that is clearly nonsense.
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Greenwood2
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Post by Greenwood2 on Sept 14, 2021 9:41:14 GMT
I seem to remember a platform repaying lenders on a fraudulent loan, but just as a goodwill gesture, and I don't remember which platform (getting old). I'm getting old too but that is clearly nonsense. What is? That was back in the good old days when platforms actually did the right things sometimes (without even being prompted). Thinking about it TC did pay back some bad loans a few years ago, and 'Yes Secure' extremely surprisingly paid back (all?) of their defaulted loans when they closed down, quite a windfall for some lenders. The loan I was trying to remember was discussed either on this forum or possibly more likely on the defunct Zopa forum, I don't remember the details of the loan itself, but it was significant because at the time lenders were hopeful that that would be the way platforms would deal with fraud in the future, pity it didn't quite happen like that.
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trium
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Post by trium on Sept 14, 2021 11:26:52 GMT
I vaguely remember receiving a "goodwill" payment from Zopa several years back (I posted about it on the in-house forum). When I asked Zopa about this they said, without going into great detail, that it was in respect of a defaulted loan where their screening of borrowers had been less than satisfactory. This would have been back before Zopa introduced Safeguard.
Of course this doesn't help the OP 😕
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scooter
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Post by scooter on Sept 14, 2021 13:34:16 GMT
I'm having a quarrel with a platform for having put up a loan proposition to a borrower who didn't exist, thus losing my investment Has anyone heard of this happening ever on any platform, before or since? (REBS is the guilty party) Interested to know in what sense they do not exist? Rebs say they check for the following: UK Registered Business
Minimum 2 Years Trading History
Minimum Turnover of £150k
Good Credit History
Minimum Security of a Personal Guarantee
How could they have this information if they do not exist? Weird.
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bugs4me
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Post by bugs4me on Sept 15, 2021 8:50:41 GMT
I'm having a quarrel with a platform for having put up a loan proposition to a borrower who didn't exist, thus losing my investment Has anyone heard of this happening ever on any platform, before or since? (REBS is the guilty party) Interested to know in what sense they do not exist? Rebs say they check for the following: UK Registered Business
Minimum 2 Years Trading History
Minimum Turnover of £150k
Good Credit History
Minimum Security of a Personal Guarantee
How could they have this information if they do not exist? Weird.
I am not aware of a single P2P Platform, either active or defunct that do not make claims to the effect they carry out rigorous DD, background checking, creditworthiness, etc, etc. The simple fact is that there exists a significant minority of fraudsters borrowers that are light years ahead of the platforms as to how to obtain money by deception - and that's just with the honest platforms. Factor in those platforms that go rogue and anything can and indeed does happen.
Problem is that as the loan size has grown, P2P companies making acceptable financial redress to lenders/investors is very much historical. They prefer to engage in the Olympic sport of can-kicking.
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scooter
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Post by scooter on Sept 15, 2021 16:58:41 GMT
Couldn't agree more, but investors have to fight back until something changes.
July 2018 consultation paper on loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms:
“It is our view that it will be unlikely that a platform could argue that it has met its obligations under Principle 2, Principle 6 (PRIN 2.1.1R) and the client's best interests rule (COBS 2.1.1R), if it has not undertaken enough due diligence to satisfy itself on the essential information on which any communication or promotion is based.”
The FO have recently taken this as clarification of existing rules, so it doesn't matter if the loan is older than 2018. I guess the platform claim that they ask investors to do their own dd but this ruling seems to suggest that it should never have made it onto the platform.
I only wish that platforms had half the wits of fraudsters. I wish the FO did as well...
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mikeb
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Post by mikeb on Sept 19, 2021 15:17:32 GMT
I'm getting old too but that is clearly nonsense. What is? That was back in the good old days when platforms actually did the right things sometimes (without even being prompted). Thinking about it TC did pay back some bad loans a few years ago, and 'Yes Secure' extremely surprisingly paid back (all?) of their defaulted loans when they closed down, quite a windfall for some lenders. The loan I was trying to remember was discussed either on this forum or possibly more likely on the defunct Zopa forum, I don't remember the details of the loan itself, but it was significant because at the time lenders were hopeful that that would be the way platforms would deal with fraud in the future, pity it didn't quite happen like that. It is not nonsense. Funding Circle also did this on one of the loans I held, where they returned lenders' capital. It was in their FAQs, quite clearly, that in the event of FC letting a fraudulent application through, they would compensate lenders. And they did so. In the early days. At some later point, the Official Funding Circle rep (when they used to post on here/the original "Independent Forum"/FC's own forum ...) claimed that no such arrangement was in their T&C. Two posters (one, myself) found the relevant material description of "How FC works" on their site and posted quotes of it. Their defence/explanation was "Oh, that promise -- well it's not in the T&C and although we said it, we won't be doing that now." Funnily enough, for some reason, it wasn't something they kept on doing ... it was easier just to let lenders carry the can for any occasional please-don't-say-fraud-there-is-no-proof loans. Otherwise, FC would have crashed some time ago ...
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